WIESBADEN – As reported by the Federal Statistical Office (Destatis), the consumer price index for Germany is expected to increase by 2.6% on an annual average in 2008. This is the highest year-on-year rate of price increase for 14 years (1994: +2.8%). In December 2008, the rate of price increase is expected to reach 1.1%, according to the results available from six Länder. As compared with November 2008, consumer prices have risen by 0.3%. The year 2008 started out with relatively high inflation rates, which were highest in June and July at +3.3% each, as compared to the corresponding months of the preceding year. Since then, the upward trend in prices has slowed down. Since November, the inflation rate has again fallen below the threshold of 2%, which plays an important role for monetary policy. The high inflation rates up to the middle of 2008 as well as the subsequent slowdown were mainly due to the price trends for liquid fuel and motor fuels, but also to the development of some food prices. The strong rise in the prices of these goods as of autumn 2007 was followed by rather stable or partly decreasing prices from the summer months of 2008 onwards. The harmonised consumer price index for Germany, which is calculated for European purposes, is expected to rise by 2.8% on an annual average in 2008 compared with the annual average of 2007. In December 2008, the harmonised consumer price index is expected to increase by 1.1% on December 2007. Compared with November 2008, this will be a price increase of 0.4%. The final results for the year 2008 and for December 2008 will be released on 15 January 2009.
