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Economy in Brief


Inflation In France And Germany
by Louise Curley April 13, 2010

Inflation, as measured by the year over year percentage change in the Consumer Price Index, accelerated in France and Germany in March as can be seen in the first chart.

Inflation in Germany increased to 1.21% in March, up from 0.47% in February. The sharp increase was due largely to the rise in energy and fresh food prices. "Core" inflation, which excludes these items, rose 0.85% in March compared with a rise of 0.57% in February. The March rise in Core inflation was surprising and somewhat worrisome in view of its generally downward trend since July, 2008 when it reached 3.54%. Overall and core inflation for Germany are shown in the second chart.

Inflation in France rose 1.58% in March, compared with a 1.28% in February. "Core" inflation in France, however, declined from 1.85% in February to 1.68% in March in contrast to Germany's rise. France publishes a seasonally adjusted "underlying index", ISJ (Index Sous Jacent) that excludes the prices of fresh products, energy, tobacco and public service tariffs. Core inflation in France has tended to be some 100 basis points higher than that in Germany, as can be seen in the following table. Overall and core inflation in France are shown in the second chart.

Year over Year % Change Mar 10  Feb 10  Jan 10 Dec 09 Nov 09 Oct 09 Sep 09 Aug 09
  Consumer Price Index 1.21 0.47 0.75 0.84 0.28 -0.09 -0.40 -0.09
  CPI ex food and energy 0.85 0.57 0.76 1.04 0.95 1.05 1.05 1.14
  Consumer Price Index 1.58 1.28 1.10 0.91 0.39 -0.21 -0.36 -0.18
  Core Index (ISJ) 1.68 1.85 1.57 1.76 1.65 1.79 1.95 2.31
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