Inflation in Germany averaged 1.6 percent in 2004, its highest level in three years, with increased tobacco taxes pushing up the cost of living in the eurozone's biggest economy, year end data showed Wednesday. In December alone, the German consumer price index rose by 2.1 percent on a 12-month basis, fractionally higher than the preliminary estimate of 2.0 percent calculated last month. The federal statistics office calculated that consumer price inflation averaged 1.6 percent in the whole of 2004, up from 1.1 percent in 2003 and 1.4 percent in 2002. It was the highest average annual rate of inflation since 2001, the statisticians noted. December's 2.1 percent inflation rate was up from 1.8 percent in November, on higher prices for package holidays, holiday accommodation and tobacco taxes, the statistics office said.