German Inflation Slows Down

Inflation in Germany, the eurozone's biggest economy, looked set to slow this month, key regional data showed on Monday. In the southern state of Bavaria, the consumer price index (CPI) fell by 0.4 percent in January from the figure for December and was 2.0 percent higher than it had been in January 2004. The 12-month rate of inflation was therefore substantially slower than the 2.5 percent recorded in December. A similar slowdown was observed in other key regional states. In North Rhine-Westphalia, Germany's most populous state, the CPI rose by 1.5 percent on a 12-month basis in January, slower than the 1.8 percent recorded in December. Consumer price inflation also slowed in the eastern state of Brandenburg, where the CPI rose by 2.0 percent on a 12-month basis in January, compared with 2.5 percent in December. The regional price data from six so-called indicator states -- Baden-Württemberg, Bavaria, Brandenburg, Hesse, North Rhine-Westphalia and Saxony -- are used to calculate preliminary pan-German inflation.