German inflation confirmed at 32-month low in February

The secondary reading of German inflation on Tuesday confirmed that the annual rise in consumer prices eased to a 32-month low in February as a result of a sharp slowdown in food-price growth.

The headline harmonised index of consumer prices fell to a year-on-year rate of 2.5% last month, down from 2.9% in January and 3.7% in December.

This was in line with the initial reading released two weeks ago, and matching the consensus forecast, confirming the lowest rate of inflation since June 2021.

"The rate of inflation has continued to slow," said Ruth Brand, president of the federal statistical office, Destatis.

"The price situation for energy products continues to ease. The increase in food prices has slowed markedly and is now below the overall inflation rate for the first time in more than two years."

Annual food inflation eased to just 0.9% from 3.8% the month before, which was put down to falling prices of fresh vegetables and dairy.

"Note that the IFO selling price index in food and non-alcoholic beverages jumped in February, pointing to a rebound in food inflation in the next few months," highlighted Claus Vistesen, economist at Pantheon Macroeconomics.