Germany’s HICP inflation likely to average 0.7% in 2016, 1.7% in 2017

Germany's January flash HICP inflation is likely to accelerate higher to 0.3% y/y, as compared with December' s reading of 0.2%. This slight rebound in the headline component might occur mainly due to positive base effects from the energy component as food prices are expected to fall marginally in January. The core component is likely to be stable at 1% y/y as only slight gains are expected to be recorded in January in core goods and services.

"We expect German HICP inflation to average 0.7% in 2016 and 1.7% in 2017, while the core metric should average 1.3% in 2016 and 1.4% in 2017", says Societe Generale.