Falling energy prices push German inflation down to 0%

GMT 14:49 2016 Friday ,26 February

Arab Today, arab today Falling energy prices push German inflation down to 0%

Germany's national inflation yardstick
Frankfurt - AFP

Falling energy prices caused inflation in Germany to grind to a halt this month for the first time since September 2015, a preliminary flash estimate showed on Friday.

Germany's national inflation yardstick, the consumer price index, stood at zero percent in February, compared with 0.5 percent in January, the federal statistics office Destatis said.

And using the Harmonised Index of Consumer Prices (HICP) -- the barometer used by the European Central Bank -- the inflation rate stood at minus 0.2 percent in February, compared with plus 0.4 percent in January.

The ECB regards annual inflation rates of close to but just under 2.0 percent as conducive to healthy economic growth and in recent years has launched a raft of measures to kickstart prices and push area-wide inflation back up nearer that level.

A controversial programme of sovereign bond purchases, known as QE or quantitative easing, was rolled out last year and initially appeared to work.

But the economic slowdown in China and depressed oil prices have pushed inflation expectations back down again.

At the ECB's first policy meeting this year, president Mario Draghi suggested additional monetary easing could be on the cards as early as March if inflation expectations do not pick up soon.

The inflation data on Friday were a preliminary flash estimate calculated from consumer price data for six of Germany's 16 regional states.

Final data based on all 16 states were scheduled to be published on March 11.


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