German inflation slowed slightly in December, but still beat forecasts for the second month in a row, official data showed Friday, in an encouraging sign for the European Central Bank.
Consumer prices in Europe’s biggest economy rose by 1.7 percent year-on-year this month, according to figures from federal statistics authority Destatis, faster than the 1.5-percent growth predicted by analysts.
But the figure was still 0.1 percentage point lower than in November.
The Harmonized Index of Consumer Prices — the ECB’s preferred yardstick — also slipped by 0.2 percentage point to 1.6 percent, Destatis calculated.
As the 19-nation eurozone’s biggest economy, Germany is closely watched as a bellwether for the currency bloc, where the ECB has intervened massively in the economy to push inflation towards its goal of just below 2.0 percent.
Although German inflation has flirted with the target in recent months, inflation across the whole eurozone remained sluggish at 1.5 percent in November.
Earlier this year, the ECB responded to a pick-up in eurozone growth by deciding to cut its monthly bond purchases by half, to 30 billion euros ($36 billion) from January.
Policymakers remain unsure when the bloc will produce “self-sustained” inflation without the central bank’s support.
© 2017 AFP