German Inflation Down to Zero Y/Y

Business » FINANCE | June 10, 2009, Wednesday // 11:01
German Inflation Down to Zero Y/Y: German Inflation Down to Zero Y/Y German inflation will average 0,1% in 2009, the Bundesbank said June 5. It also forecast that the economy will shrink 6,2%. File photo

Germany's inflation rate fell to zero in May 2009 year-on-year for the first time in at least 13 years over lower energy costs and weakening demand.

German consumer prices decreased 0,1% in May month-on-month, Germany's statistics office said, as cited by Bloomberg.com.

A 46 % decline in crude oil prices over the past year is pushing down inflation at the same time as companies cut prices to tackle the deepest recession since World War II.

The European Central Bank has downplayed the chance of deflation in Europe, with President Jean-Claude Trichet saying inflation will only temporarily move into negative territory in 2009.

"Inflation will fall below zero in the next few months and stay there based on oil prices. The risk of deflation is small because core inflation is relatively high", Stefan Bielmeier, head of economic research at Deutsche Bank AG in Frankfurt, said.

German inflation will average 0,1% in 2009, the Bundesbank said June 5. It also forecast that the economy will shrink 6,2%.

 

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Tags: Global Financial Crisis, German economy, inflation

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