Slowing inflation poses risk to German economy

Annual inflation rates in Germany slowed for the third consecutive month, increasing the risk of deflation to its economy.

Figures from the statistics office indicate consumer prices fell by less than half a per cent but were up by 0.7% year-on-year.

The annual rate of inflation was down in March by 0.2% to 1% in April.

This was a continued trend from February's rate at 1.3%.

March's decline has been attributed mainly to a fall in prices for mineral oil products, the consumer price index would have remained unchanged in April if heating and motor fuel were excluded.

There has been a recent easing of inflation in so-called "Euroland" due to falling oil prices and a slower demand for goods.

Eurostat, the EU statistic office estimated last week that eurozone inflation dropped from 2.1% in April to 1.9% in May.