Inflation hits 14-year high in 2008
German inflation slowed in December but Europe's biggest economy still registered its highest annual inflation rate in 14 years, provisional official figures released on Tuesday showed.
The inflation rate eased to 1.1 percent in December compared with the same month last year, down from 1.4 percent in November, according to the figures from the national statistics office Destatis.
But for all of 2008, an inflation rate of 2.6 percent exceeded last year's level of 2.2 percent and was the highest since 1994, when it reached 2.8 percent.
"The year 2008 started out with relatively high inflation rates, which were highest in June and July at 3.3 percent" on a 12-month basis, a Destatis statement said.
The spike and a subsequent sharp slowdown were mainly the result of volatile prices for fuels and some food items, it added. Final figures are due on January 15.
Postbank analyst Fabienne Riefer said inflation for the entire eurozone, which will have 16 members when Slovakia joins on Thursday, should now fall below 2.0 percent in December for the first time since August 2007.
The European Central Bank's medium-term target is close to but below 2.0 percent. In mid 2009, eurozone inflation could also fall below 1.0 percent before rising towards the end of the year, Riefer forecast.
Comments
See Also
The inflation rate eased to 1.1 percent in December compared with the same month last year, down from 1.4 percent in November, according to the figures from the national statistics office Destatis.
But for all of 2008, an inflation rate of 2.6 percent exceeded last year's level of 2.2 percent and was the highest since 1994, when it reached 2.8 percent.
"The year 2008 started out with relatively high inflation rates, which were highest in June and July at 3.3 percent" on a 12-month basis, a Destatis statement said.
The spike and a subsequent sharp slowdown were mainly the result of volatile prices for fuels and some food items, it added. Final figures are due on January 15.
Postbank analyst Fabienne Riefer said inflation for the entire eurozone, which will have 16 members when Slovakia joins on Thursday, should now fall below 2.0 percent in December for the first time since August 2007.
The European Central Bank's medium-term target is close to but below 2.0 percent. In mid 2009, eurozone inflation could also fall below 1.0 percent before rising towards the end of the year, Riefer forecast.
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.