Bloomberg News

Six German States Say August Inflation Quickened on Oil

August 29, 2012

Inflation in six German states accelerated in August on higher energy costs.

The inflation rates in Bavaria rose to 2.5 percent from 2.2 percent in July, the state’s statistics office said today. Rates also climbed in Hesse, Brandenburg, Baden-Wuerttemberg, Saxony and North Rhine-Westphalia.

Economists forecast that Germany’s inflation rate, calculated using a harmonized European-Union method, will rise to 2 percent from 1.9 percent in July, the median of 22 estimates in a Bloomberg News survey shows. The Federal Statistics Office in Wiesbaden will release that report at 2 p.m. today.

Oil prices have surged about 25 percent since the end of June as storms in the Gulf of Mexico crimped output. At the same time, the European Central Bank predicts that euro-area inflation will slow to below its 2 percent limit next year and is easing monetary policy to fight the region’s debt crisis.

“Rising oil prices are the main booster for inflation,” said Stefan Muetze, an economist at Helaba in Frankfurt. “We expect German inflation to be above 2 percent in 2013 unless the debt crisis in the euro area deteriorates.”

In Bavaria, consumer prices rose 0.4 percent from a month earlier, the statistics office said. Heating oil prices gained 2.1 percent from July and were 13.6 percent higher than a year ago. The cost of fuel increased 4.1 percent in August and rose 9.9 percent from a year earlier.

Economists predict euro-area inflation will accelerate to 2.5 percent in August from 2.4 percent in July, according to the median of 31 estimates in a separate Bloomberg survey. Eurostat, the European Union’s statistics office, will publish that report on Aug. 31.

                         Monthly            Yearly
                         Change             Change

Saxony                  0.3% (0.4%)        2.1% (1.8%)
Hesse                   0.4% (0.4%)        2.3% (1.7%)
Bavaria                 0.4% (0.4%)        2.5% (2.2%)
Brandenburg             0.2% (0.4%)        2.0% (1.7%)
North Rhine-Westphalia  0.4% (0.4%)        1.9% (1.3%)
Baden-Wuerttemberg      0.2% (0.4%)        1.8% (1.4%)

To contact the reporter on this story: Stefan Riecher in Frankfurt at sriecher@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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