German import prices climbed faster than expected last month, following the surged in global oil prices.
The Import Price Index rose 3 percent year on year in September, up from 2.1 percent in August and better than the 2.6 percent gain expected by most experts.
On a monthly basis, import prices climbed 0.9 percent after being flat in August. Also, this is higher than the 0.5 percent gain predicted by economists.
Rising global oil prices continued to boost production costs and support the manufacturing sector in the Europe’s largest economy. The economy grew at 0.6 percent in the second quarter following a 0.7 percent expansion in the first quarter of the year.
However, weak inflation growth remains a concern in the Europe’s largest economy, rising just 1.8 percent year-on-year in September and slightly below the 1.9 percent expected.
Meanwhile, the European Central Bank on Thursday said the inflation rate in the Euro-area, 1.5 percent is still far from its 2 percent target and it is expected to remain just below the target until late 2019.
But due to the improved economic outlook and rising productivity in the Euro-area, the ECB announced it would cut down on bond purchase program from 60 billion euro to 30 billion euro starting from January 2018 and expect to maintain it through September of the same year, except economic condition changes.
“If the outlook becomes less favorable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the Asset Purchasing Program in terms of size and/or duration,” ECB stated in the Monetary Policy report released on Thursday.
The Euro has lost about 1 percent against the US dollar since the ECB announcement on Thursday.
