German Inflation Slows In January

Inflation in Germany, the eurozone's biggest economy, slowed sharply in January, final data showed on Friday. The German consumer price index (CPI) fell by 0.4 percent in January from the figure for December and was 1.6 percent higher than it had been in Jan. 2004, the federal statistics office said in a statement. The 12-month rate of inflation was therefore substantially slower than the 2.1 percent recorded in December. According to the statisticians, the main reason for the slowdown was an increase in consumer prices in January 2004 due to healthcare reforms, an effect which was absent in January this year. On the other hand, oil prices continued to fuel inflation, with the price of light heating oil surging by 20.5 percent on a 12-month basis. Excluding oil prices, CPI would have risen by 1.4 percent year-on-year last month, the office said. At the same time, it reported a sharp increase in producer price inflation (PPI), which rose by 0.8 percent in January and thus was 3.9 percent higher than in January 2004.