Germany's August Inflation Accelerates to 2.9% on Higher Energy Prices
Macro
According to preliminary data released by the Federal Statistical Office of Germany on August 31, the consumer price index (CPI) rose by 2.9% year-on-year in August on the EU-harmonized basis (HICP), accelerating from 2.8% in July. This was driven by higher energy prices amid the Iran conflict, but the increase was below the market expectation of 3.1%. Core inflation remained unchanged at 2.4% from the previous month. Energy prices rose by 10.5%, up from 8.3% in July. Ralph Solveen, senior economist at Commerzbank, said that if the situation in the Gulf region does not deteriorate further, energy prices could decline slightly, but due to ongoing uncertainty, prices are likely to remain significantly above pre-war levels. The eurozone-wide inflation rate for August, due to be released on September 1, is expected to accelerate to 3.3% from 2.9% in July.
