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Germany slides into deflation

FACTORYmERCGermany has become the latest eurozone country to spiral down into deflation, joining its fellow euro area partners.

Inflation fell below zero for the first time since October 2009 with prices dropping by 0.3% in the year to January, according to preliminary estimates from the German statistics agency Destatis.

Eurostat will publish inflation figures for the euro area as a whole on Friday.

One factor in the pot was the fall in oil prices which has brought down inflation in many parts of the world, including Germany. The cost of industrial goods and of food in the eurozone remained flat, with only prices for services going up.

Economists predict that the impact of lower oil costs could keep Germany in negative inflation for at least the coming six months.

The news comes after the ECB launched a €1.1 trillion quantitative easing programme to try to stimulate growth in the region.

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