Sharp drop in March Saxony CPI as food, package holiday prices fall
Consumer prices in the German state of Saxony saw a big drop in March as the impact of the cold-weather snap in Southern Europe on food prices blew over and last year's rise in oil prices fell out of the calculations.
The headline year-on-year rate of CPI fell from 2.4% in February to 1.8% for March.
Food inflation fell back from a 5.3% clip to 3.1%, largely due to a large decrease in vegetable food price inflation as the cold weather-induced supply shock in Southern Europe passed.
Household energy inflation also decreased as the volatility seen in oil prices at the start of 2016 dropped out of the CPI calculations.
Core inflation was also lower, slipping from a 1.4% pace in February to 1.2% in March, as the cost of package holidays dived 7.1%, more than offsetting a rebound in clothing inflation on the back of aggressive discounting.
The data pointed to a downside surprise in the nationwide German CPI, analysts said.