Final HICP November: -0.2% m/m +0.3% y/y

Final CPI November: -0.1% m/m, +0.4% y/y

BERLIN (MNI) - Germany's harmonized annual inflation rate rose to +0.3% in November from -0.1% y/y in October, the Federal Statistical Office said Wednesday, revising down its flash estimate of +0.4%.

The stats office also revised down the monthly rate to -0.2% from the flash estimate of -0.1%. In October, consumer prices had risen by 0.1%.

Germany's national CPI was revised to -0.1% m/m and +0.4% y/y from -0.2% m/m and +0.3% y/y, respectively. In October, consumer prices had risen 0.1% on the month and remained flat on the year.

The monthly drop was driven by lower prices for clothing and shoes, gas, packaged holiday tours as well as hotel and restaurant services.

Annual price developments were mainly due to higher prices for electricity, motor fuels, tobacco products as well as hotel and restaurant services.

CPI ex-energy was down 0.2% m/m and up 0.7% y/y.

The Bundesbank last week forecast consumer prices to rise only moderately for the next two years, with downward corrections to energy and food prices now having run their course.

"Other durable and non-durable consumer goods prices should ease gradually in line with producer price developments and under the impact of global overcapacity, while services and rents are likely to reflect the flatter wage and income patterns," the central bank predicted.

Excluding energy, average inflation is projected by the Bundesbank to drop from 1.1% in 2009 to 0.8% in both 2010 and 2011. Headline inflation will likely average 0.9% in 2010 and 1.0% in 2011, compared with 0.3% this year, it said.

With unemployment expected to rise throughout 2010, analysts expect wage growth to remain subdued. The IG Metall metalworking and engineering workers union as well as the IG BCE chemical workers union have already signaled moderate demands for the next wage rounds.

The Bundesbank forecast growth in negotiated wages to slow markedly from 2.25% in 2009 to slightly more than 1.25% in 2010 and just over 1.5% in 2011. Actual earnings per employee could rise by 1% next year and 1.5% the following year after falling by 0.5% this year, it predicted.