National HICP A Touch Below Consensus, CPI Confirms State-Level Inferences

German flash December HICP was 0.1pp below consensus on both annual and monthly prints, at 3.8% Y/Y (vs 2.3% prior) and 0.2% M/M (vs -0.7% prior).

• CPI printed in line with analyst forecasts at 3.7% Y/Y (vs 3.2% prior), with the NSA monthly rate a touch below expectations at 0.1% M/M (vs 0.2% cons; -0.4% prior).
• Core CPI (ex-energy/food) was in line with MNI's estimates following this morning's state-level data at 3.5% Y/Y (vs 3.8% prior).
• As expected, energy base effects relating to December 2022 subsidies drove the headline rate higher, with energy inflation 4.1% Y/Y (vs -4.5% prior).
• More encouragingly however, services inflation continued to moderate to 3.2% Y/Y (vs 3.4% prior). State-level data suggested that the upward impact of package holidays this month may have been less pronounced than expected, helping the core rate moderate.