German final HICP inflation seen at 0.4 pct year-on-year in July

Germany’s final HICP inflation for the month of July is likely to come in same as the flash reading. According to a Societe Generale report, the HICP inflation is expected to confirm the flash estimate of 0.4 percent year-on-year. The German national consumer price index is also expected to have come in at 0.4 percent year-on-year.

The likely rebound in Germany’s inflation is mainly due to the sharp recovery in food prices, which rose from 0.1 percent year-on-year in June to 1.1 percent in July. This is likely to have contributed 9 basis points to the headline figure.

Meanwhile, the energy component eased further to -7 percent year-on-year in July, as compared with June’s -6.4 percent due to the renewed weakness in oil prices. According to the Destastis press releases, the core consumer price index inflation continued to be stable at 1.3 percent as prices paid for services continued to be steady at 1.4 percent year-on-year. Meanwhile, non-energy industrial goods prices appear to have recovered slightly in July, stated Societe Generale.