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German Flash CPI Beats Expectations

GERMAN DATA
MNI (London)

GERMANY JAN HICP +0.9% M/M, +5.1% Y/Y; DEC +5.7% Y/Y

GERMANY JAN FLASH CPI +0.4% M/M, +4.9% Y/Y; DEC +5.3% Y/Y

  • German flash inflation estimates beat expectations across the board today, with CPI coming in at 4.9% y/y, 0.5% above the consensus. HICP saw an even bigger gap, remaining remaining high at 5.1% y/y, 0.8% above expectations.
  • On the month, CPI softened only moderately to +0.4% m/m from +0.5% m/m in December (-0.2% contraction expected), whilst HICP beat by almost a full point, growing to +0.9% m/m (0.3% m/m December, 0.0% expected).
  • Consensus expectations were far too optimistic. Despite base effects of the VAT reduction wearing off and lower oil prices in 2020, inflation remained high on the back of persistently high input and energy prices.
  • Price inflation for goods was at +7.2% y/y, including +5.0% y/y for food cost in the January estimate.

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