January 31, 2025 at 05:51AM
Stagflation risks are the main concern in Germany as we come into the new year. Amid the manufacturing recession and struggling economy, higher prices are also an issue that could weigh on consumption activity. We’ve already seen the economy contract in 2023 and 2025. Will it be a three-peat in 2025? If so, that will be the first since the reunification in 1990.
Looking at the inflation data today, the estimates show that we should see the January numbers hold in line with December. Headline annual inflation is expected at 2.6% with the EU-harmonised reading at 2.8%. Those are similar to the figures we got in December.
In monthly terms though, inflation is estimated to creep up by another 0.1% after the 0.5% increase in the month before.
But as always, all eyes will be on the core reading. Core annual inflation was seen at 3.3% in December and that’s still sitting well above the desired 2% target. That’s the key sticking point at this stage, not just for Germany but also some countries in the euro area.
Here’s the agenda for today:
0900 GMT – North Rhine Westphalia
0900 GMT – Hesse
0900 GMT – Bavaria
0900 GMT – Baden Wuerttemberg
0900 GMT – Saxony
1300 GMT – Germany national preliminary figures
Do note that the releases don’t exactly follow the schedule at times and may be released a little earlier or later.
This article was written by Justin Low at www.forexlive.com.
