German inflation unexpectedly remained unchanged in November, suggesting the European Central Bank (ECB) may need to do more to meet its goal for price growth in the 19-nation euro area.
Consumer prices rose 0.7 per cent from a year ago, the federal statistics office in Wiesbaden said on Tuesday. That is below the 0.8 per cent rate forecast by economists in a Bloomberg survey. Prices were unchanged from October.
Stubbornly low inflation in Europe’s largest economy might concern ECB policy-makers as they assess risks to the region’s outlook. At their next meeting on December 8th they will debate whether €1.7 trillion of asset purchases will be enough to return euro-area inflation to below but close to 2 per cent – a level not reached in more than three years – or if more stimulus is needed.
A national measure of inflation remained at 0.8 per cent, according to the report.
Output
Recent figures on business confidence and output suggest that German economic momentum remains robust. The Bundesbank said last week that growth would likely pick up considerably in the final three months of the year, after a temporary slowdown in the third quarter.
The fortunes of Germany are key to the recovery of the euro area where economic expansion is stuck at mediocre levels and risks remain on the downside.
The region’s inflation rate rose to 0.6 per cent in November from 0.5 per cent the previous month, according to a separate Bloomberg survey. Eurostat will publish that report on Wednesday.
ECB president Mario Draghi said at a European Parliament hearing on Monday that the governing council would preserve the high level of monetary accommodation necessary to reach its inflation target. – Reuters
