- Johannes Gareis, euro-zone economist at Natixis
Consumer prices in Germany, Europe's largest economy, slowed in line with analysts' forecasts, while producer prices rose more than expected, the final data released by the Federal Statistical Office showed Wednesday. On a monthly basis, the German consumer price index (CPI) fell by 0.5% last month, while on an annual basis inflation slowed to 1.7% in January from 2.0% in December. In the meantime, price pressure at Germany's factory gates was stronger than expected, with producer prices accelerating by 0.8% on the month in January and were up 1.7% from a year earlier, due to surge in electricity prices, which soared 8.5% from a month earlier.
"The financial market experts have made their peace with the weak fourth quarter of 2012. In their opinion the German economy faces less headwinds from the euro crisis than throughout the last months", ZEW President Professor Wolfgang Franz remarked after the results.
"The outlook for 2013 remains subdued," said Peter Vanden Houte, an economist at ING Group NV in Brussels. "While a gradual improvement of the world economy is likely to support European exports, domestic demand is bound to remain very weak."
© Dukascopy Bank SA