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Inflation

Fuel prices see German inflation stuck at high level

Expensive gas and diesel at the pumps have prevented inflation in Germany from easing in October. But the renewed hike in consumer prices does not exceed levels described as destabilizing by the ECB.

Inflation in Germany keeps hovering around the 2.0-percent threshold, the National Statistics Office (Destatis) reported on Friday. The Wiesbaden-based agency said consumer prices rose by 2.0 percent in October year-on-year, after already showing the same increase in September.

The data released amid a continuously precarious eurozone debt crisis indicated that a 5.5-percent jump in gas and diesel prices year-on-year prevented inflation from going down.

Also showing a marked increase were prices for various food items, with prices for vegetables and fruits soaring by over 7.0 percent. Dairy products by contrast became much cheaper.

No cause for alarm?

Although the renewed increase in inflation leaves less money to spend in Germans' pockets, the surge will not worry the European Central Bank (ECB) which has defined a jump of up to 2.0 percent as not being dangerous with regard to financial stability in the euro area.

A panel of German economic advisors to the government said earlier this week the chances of Europe's largest economy crashing through the 2.0-percent inflation threshold would be rather slim for the rest of the year and beyond.

ECB President Mario Draghi said on Thursday that while inflation would remain above the central bank's target for the rest of the year in the 17-member euro area, it would drop below 2.0 percent in 2013.

hg/mz (Reuters, AFP, dpa)