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German inflation up slightly in November

November 30, 2015

German inflation edged up slightly in November on higher food and services costs - but it's still far away from the European Central Bank's annual target of just under 2 percent. More stimulus is likely.

https://p.dw.com/p/1HEsh
Image: picture-alliance/dpa/I. Kjer

Higher prices for food, services as well as higher rents pushed up inflation in Germany by an estimated 0.4 percent in November, according to official data.

The slight pickup in inflation from the previous month is seen as an encouraging sign by many fearing deflation and an accompanying delay in investment and spending, which would lead to investors and consumers alike waiting for prices to fall even further. In September, the inflation rate was at 0 percent.

Despite the increase, Germany's inflation figure is still far from the European Central Bank's (ECB) inflation goal of close to 2 percent. This makes it likely the ECB will decide to continue its 1.1 trillion-euro-stimulus program when it convenes on Thursday.

Deutschland EZB Euro Logo in Frankfurt
ECB's stimulus program likely to continueImage: Getty Images/AFP/D. Roland

Since March, the ECB has been trying to spur growth by buying sovereign bond purchases to flood money into the eurozone's banks to encourage them to hand out more loans.

While the program saw some success in the beginning, the economic slowdown in China and falling oil prices have kept both growth and inflation expectations modest within the eurozone.

Germany's estimated inflation growth for November is based on consumer price data for six of the country's 16 states, with the final figures for all states to be published on December 11. Analysts are also expecting data later this week showing Eurozone prices beyond Germany to fall short of the ECB's target as well.

jd/ng (dpa, AFP)