inflation germanyThe consumer prices in Germany remained dangerously close to the possibility of falling into stagnation, confirmed the Federal Statistical Office (Destatis) in its final report in December. The news is the latest sign that inflation in the euro area gradually passes in negative territory, which will probably force the European Central Bank (ECB) to take more decisive action. Inflation in Germany slowed to 0.2% YoY, but grew with 0.6% MoM. The level was the lowest since October 2009. The preliminary data presented earlier in the month were slightly more optimistic and showed annual inflation rate of 0.4%.

    Measured on a monthly basis, the German inflation remained unchanged after zero growth in the previous month. The result confirmed the initial assessment. Separate measure specifically designed to enable a comparison between European inflation data – ie. harmonized consumer price index showed inflation of 0.1% on a monthly and annual basis. Analysts predicted levels of 0.2%. The news came amid debate in Europe whether the ECB to resort to incentives, including the purchase of government bonds because of the danger of falling into a deflationary spiral. Germany is the main center of opposition to quantitative easing, but the weakening of the growth of prices in the country can reassure the ECB President Mario Draghi.