BERLIN, July 30 - Preliminary inflation figures for July indicate a pickup in consumer price inflation across four of Germany's most important states, a development that suggests the national inflation rate may rise when full data are published.
State-level readings
- Bavaria: inflation increased to 2.8% in July from 2.5% in June.
- North Rhine-Westphalia: the rate rose to 2.7% in July from 2.1% in June.
- Baden-Wuerttemberg: inflation climbed to 2.5% in July from 2.1% in June.
- Lower Saxony: the rate edged up to 2.7% in July from 2.5% in June.
Those regional accelerations precede the release of national consumer price statistics later on Tuesday. Economists polled expect the harmonised national inflation rate for Germany - the euro zone's largest economy - to register 2.8% in July, up from 2.4% in June.
Drivers cited
The German government has pointed to higher energy and raw material prices linked to the war in Iran as a factor lifting inflation in recent months, and now anticipates inflation to accelerate to 2.7% for the year and to reach 2.8% in 2027. The European Central Bank kept borrowing costs on hold in July but indicated it may tighten further in the months ahead, referencing rising energy prices tied to a widening conflict in the Middle East when explaining its stance.
Broader context
German regional data arrive ahead of euro zone inflation figures due on Friday. Economists expect headline inflation across the bloc to be 2.9% in July, a modest increase from 2.8% in the prior month. The sequence of regional, national and euro zone releases will provide the next set of signals for policymakers and markets about the persistence of price pressures.
At this stage, the preliminary state numbers underline a near-term strengthening of inflationary readings in key German states and frame the data releases scheduled later this week.