Germany’s HICP and CPI inflation likely to have improved slightly in August

Germany’s both preliminary consumer price index and harmonised index of consumer prices are expected to have improved a bit in August. According to a Societe Generale research note, both CPI and HICP inflation are likely to have continued rebounding a bit each to 0.6 percent year-on-year.

Prices of energy are anticipated to have dropped slightly for the second consecutive month; however, it would still register a small drop in year-on-year terms. Meanwhile, food prices are expected to have remained stable after rising sharply to 1.5 percent year-on-year in July from previous month’s 0.9 percent.

Core inflation is expected to have remained stable with a slight rise in services inflation and stable non-energy industrial goods. Core inflation has been improving continuously since May 2016. Germany’s HICP inflation is expected to continue rebounding at a more rapid pace, accelerating above 1 percent by the end of 2016, led by energy base effects, said Societe Generale.