10 December 2002, 10:43  

RANKFURT (MktNews) - German final harmonised consumer prices (HICP) for November were revised down to -0.5% m/m and +1.0% y/y from an initial -0.4% m/m and +1.1% y/y , the Federal Statistical Office announced Tuesday.
German HICP fell 0.1% m/m and +1.3% y/y in October. National CPI was unrevised at -0.4% m/m and +1.1% y/y after a flat reading m/m and +1.3% y/y in October.
The downward revision to HICP will increase talk that German prices are bordering on deflation. The ECB has already identified 1.0% inflation as the borderline for its zone of concern, given measurement error.
German HICP has stood at 1.0% y/y or below in six of the last seven months. In June HICP stood at only 0.7% y/y, while in October it stood at 1.3%.
German prices will likely get a big boost in January due to tax increases and social insurance contribution hikes due to take effect then. However, this tax-hike inspired rise will come against the high base created by sharp inflation increases posted early this year, so it is unclear what the annual inflation rate will look like. In November, the national consumer price index excluding oil products rose 0.8% on the year in November after +0.9% y/y in October.
Price declines during November this year were noted mainly for light heating oil (-9.8% m/m), motor fuels (-3.8% m/m), package vacation (-3.9% m/m) and lodging costs (-6.4% m/m). Prices for food and non-alcoholic beverages fell 0.4% m/m in November. Price increases were subdued, led by furniture and household appliances (+0.2% m/m) and for health care products (+0.1% m/m). //www.marketnews.com

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