German inflation rebounds in February

FRANKFURT AM MAIN: Inflation in Germany regained ground in February after three successive months of falls, official data showed, as the European Central Bank struggles to stimulate price growth in the eurozone.

Prices increased 1.6 percent year-on-year this month, federal statistics authority Destatis said, up from a 1.4-percent rate in January.

Measured using the Harmonised Index of Consumer Prices (HICP)-- the ECB's preferred yardstick -- inflation in the eurozone's largest economy reached 1.7 percent, flat on January's reading and not far off the institution's target of close to, but below, 2.0 percent.

Looking to different elements in the inflation basket, the two most volatile elements made themselves felt in February as energy and food price growth picked up pace.

Energy costs were up 2.9 percent this month compared with 2.3 in January, while the pace of food prices rises almost doubled, to 1.5 percent.

Nevertheless, "the transmission from higher wage growth to faster inflation is still barely existing" in Germany, ING Diba bank economist Carsten Brzeski commented.

"Today's inflation data might still leave the ECB a bit baffled."

The ECB wound up mass bond-buying in December -- a scheme designed to stoke inflation by pumping cash through the financial system and stimulating growth.

That has left it with few levers left to pull to boost price growth, even as inflation fell to just 1.4 percent across the 19-nation eurozone in January.

Policymakers are mulling a repeat of low-interest loans to banks used to keep credit flowing to the real economy in the wake of the financial crisis.

In the meantime, "together with the strong labour market and high consumer confidence, low inflation is a welcome shield" for Germany against uncertainties like global trade conflicts, analyst Brzeski said.