German annual inflation quickened for the first time in seven months in April, boosted by high energy costs, and a senior economic adviser to the government said the risks of high oil prices were being underestimated.
The Federal Statistics Office said on Friday that annual inflation, measured by the national consumer price index (CPI), accelerated for the first time since September to 2.0 percent in April, confirming a preliminary estimate issued last month.
"The current rise in the annual rate of inflation can be attributed to price increases for mineral oil products in particular," the Office said. German annual CPI rose 1.8 percent in March.
Bert Ruerup, the head of the government's panel of economic advisers, said in a newspaper interview that the risk the oil price posed to Europe's largest economy was underestimated at present.
"We've all got used to seeing the oil price as no problem, because the recycling of petrodollars boosts exports," he said in the interview with the Frankfurter Allgemeine Zeitung published on Friday. "At some point the higher oil prices will come down on the consumers and bills for heating costs will rise."
Growth in industrial output in the first quarter dipped to its slowest pace in a year in spite of surging optimism about the economic outlook among manufacturers. Some analysts identified high oil prices as a key factor in the slowdown.
A preliminary estimate from the Office on Thursday showed the German economy grew by a weaker-than-expected 0.4 percent quarter-on-quarter in the January-March period.
Month-on-month, German prices rose 0.4 percent in April after being unchanged in the previous month, the Office said.
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The Office also confirmed its initial estimate for Germany's EU-harmonised index of consumer prices (HICP), which was up 0.4 percent on the month and 2.3 percent on the year.