BERLIN, April 25 - A sharp fall in fuel prices helped push down German consumer prices in April, but dearer fresh food limited the decline, according to regional data from five German states. Data from six German states is used to calculate a preliminary national figure, which the federal statistics office said would be published around noon on Friday. The state of Saxony will publish its April price data at 0900 GMT. The states of Bavaria and Baden-Wuerttemberg said annual inflation rates steadied in April at the March levels of 1.4 percent and 1.3 percent respectively. Month-on-month, prices were 0.2 percent lower in both states. The data followed figures from the states of Hesse, earlier on Friday and Brandenburg and North Rhine-Westphalia on Thursday.
The data showed sharp month-on-month falls in the price of heating oil and fuels were countered by a higher seasonal food prices. Analysts said the jump in food prices was preventing a stronger easing in inflation, although the headline numbers are expected to be in line with the consensus forecast for 1.1 percent year-on-year, for a monthly decline of 0.2 percent. "The data show that inflation is still very subdued in Germany, mainly due to the weak economy, although, as expected, oil also helped to bring prices down. However, a rise in seasonal food prices prevented a sharper decline," said Julia von Landesberger, an economist at HVB Group in Munich. Data from the five states to have reported so far, showed the price of heating oil slumped by between 16 and 24 percent from the previous month, while petrol was also considerably cheaper. The price falls reflect a drop in the price of crude oil of around 30 percent since early March, after it spiked to over $30 in the build-up to the Iraq war. Economists said if Germany's euro zone neighbours showed similar price developments, euro zone inflation could soon fall below the European Central Bank's two-percent ceiling, although this was unlikely to influence the bank's monetary policy. HVB's Von Landesberger says euro zone inflation could ease below the two-percent mark in May, helped by lower oil prices.
"The oil price decline will certainly help inflation ease in other euro zone countries, although in Italy this effect was offset by changes to other energy components. However, on the whole, inflation is trending down," he said. Italian inflation rose slightly in April, according to economists' estimates based on regional data published this week. Germany has one of the lowest inflation rates in the euro zone, hovering around one percent, while inflation in countries such as Italy, France and Spain has remained stubbornly over two percent. The Organisation for Economic Cooperation and Development forecast in its semi-annual outlook on Thursday that inflation in Germany would average 0.8 percent this year and 0.4 percent in 2004, and said inflation could approach zero.//