BERLIN: German inflation weakened sharply in December to its lowest rate in more than five years, the country’s statistics office said Monday, raising the odds that consumer prices in the eurozone as a whole fell last month for the first time since the depths of the global financial crisis in 2009.
The report from Germany, Europe’s largest economy, comes on the heels of steep price drops in euro members Spain and Cyprus. It also supports mounting expectations in financial markets that the European Central Bank will launch large purchases of government bonds as soon as its next policy meeting on Jan. 22 to avert a debilitating slide into deflation.
The annual rate of inflation in Germany, measured according to common European Union standards, was 0.1% in December, while prices also rose 0.1% on the month, the Federal Statistics Office said. The yearly rise was the weakest since October 2009.
The figures were weaker than analysts had expected. Economists in a survey by The Wall Street Journal projected the German consumer-price index would rise 0.3% both on the month and on the year. In November, prices rose 0.5% in annual terms.
