Germany's annual rate of inflation slowed to 1.6 percent in January from 2.1 percent in December as a spike in health costs last year fell out of the consumer price index, preliminary official data showed on Tuesday. "The strong price increases of the health reforms that became effective in January 2004 (0.6 percentage points from the headline index's 1.2 percent) are now subduing the annual rate in January 2005 (base effect)," Germany's Federal Statistics Office said in a statement.
Prior to the release of the data from six German states, which is used to compile the national estimate, economists had forecast annual German inflation would ease to 1.8 percent.
Consumer prices, harmonised to conform with other European Union countries, fell by 0.5 percent on the month and rose by 1.6 percent from a year earlier, the office said. Germany accounts for around a third of the eurozone consumer price index, which in December showed annual inflation of 2.4 percent.