German inflation stuck at 0.8% for third month in a row

Published Wed, Oct 15, 2014 · 06:12 AM
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[Frankfurt] Inflation in Germany, Europe's biggest economy, remained stuck at an ultra-low level for the third month in a row in September, final data showed on Wednesday.

Confirming to a flash estimate released at the end of September, the federal statistics office Destatis calculated in final data that German inflation stood at just 0.8 per cent year-on-year last month, unchanged since July.

The last time inflation in Germany was lower than 0.8 per cent was in February 2010.

Inflation has been unusually low across the 18-nation eurozone, fuelling concern the region could slip into deflation - a sustained and widespread drop in prices that hampers economic activity and threatens job losses.

While falling prices may sound good for consumers, deflation can trigger a vicious spiral where businesses and households delay purchases, throttling demand and causing companies to lay off workers.

Such concerns persuaded the European Central Bank to cut interest rates last month and unveil other measures to ease monetary conditions in the single-currency area.

Using the Harmonised Index of Consumer Prices (HICP) - the yardstick used by the ECB - inflation in Germany also stood at 0.8 per cent in September, far below the bank's annual inflation target of just below 2.0 per cent.


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