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Fri, 31 Oct, 2014 12:00:26 AM FTimes- Xinhua Report, Oct 31
Annual inflation in Germany remained unchanged at a four-year low level in October, official preliminary data showed on Thursday, underlining concerns about deflation risks in the euro zone.
Measured by consumer price index (CPI), annual inflation rate in Europe's biggest economy was 0.8 percent in October, stuck at the same level since July this year, said German Federal Statistical Office (Destatis).
A lower inflation was last seen in February 2010, when German consumer prices increased by 0.5 percent year-on-year.
While low prices seem attractive for consumers, a long lasting weak inflation is dangerous to economy as it would lead to a spiral where prices keep falling because consumers postpone their purchasing due to expectations that prices will drop further.
When measured by harmonised index of consumer prices (HICP), European Central Bank's yardstick, German inflation was more worrisome as it fell unexpectedly in October to 0.7 percent, the lowest level since May.
ECB aims to limit inflation in the euro zone at "below, but close to 2 percent". In September, consumer prices in the common currency area increased merely by 0.3 percent, within an area where ECB classified as "danger zone".
An official data of euro zone inflation in October was scheduled to be released on Friday.
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