25 September 2001, 13:39 Buba's Zeitler welcomes latest slowdown in German CPI
MUNICH (FWN) - Bundesbank council member and Bavarian central bank president
Franz-Christoph Zeitler welcomed the latest slowdown in German CPI, but said it
was too early to say that price stability could be sustained.
"The first indications for inflation in September from the German states
signal a welcoming slowdown towards 2 pct," Zeitler said.
The European Central Bank has a 2 pct price stability ceiling for
inflation.
However, Zeitler added that inflation is not yet guaranteed to remain
around
2 pct in the long-term, as the latest slowdown is largely attributable to a
basis effect.
In the short-term, Zeitler expects price stability to be affected by tax
hikes such as for insurance and tobacco, while there is also uncertainty
surrounding oil prices.
"One should carefully observe the development of euro zone M3money supply
in the short-term," Zeitler added.
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