The German inflation slows down in January on an annual basis to 1.6%, down 1.7%, according to a preliminary estimate of the German Federal Bureau of Statistics. On a monthly basis Germany report a deflation of 0.7% against a preliminary expectations or negative inflation of 0.5%. By comparison, in December, consumer prices rose by 0.6%.
On an annual basis, commodity prices increased by 1.5% compared to 1.8% in the previous month, as energy prices increased by 0.9% over the previous year. By comparison, energy rose in December by 1.3%.
The food prices are up by 3.1% from 3% in December. The rise in service prices kept its pace of 1.6%, with rents rising by 1.7%, the same level being recorded a month earlier.
The harmonized consumer price index in Germany rose by 1.4% yoy and dropped 1% mom, according to the preliminary data. The monthly harmonized results are also below expectations for a fall in prices in the consumer sector by 0.7%.
The inflation data in the largest European economy is monitored carefully due to their impact on the monetary policy of the European Central Bank.
The ECB governor last week said that the currency bloc’s economy still needs support in order to continue to accelerate inflation to healthier levels. According to Mario Draghi, despite a stronger economic recovery, “significant support” is still needed.