Inflation in the eurozone’s largest economy unexpectedly slowed in January

Inflation in Germany, the eurozone’s largest economy, slowed to 9.2% in January and was lower than expected.

It is reported Financial Times with reference to the Federal Statistical Agency of Germany.

Thus, the inflation rate decreased to 9.2% in January from 9.6% in December. At the same time, the agency did not provide details about the reasons for the change or how government subsidies for energy consumers were taken into account. According to a Reuters poll, economists expected inflation to rise to 10% in January.

Due to a technical problem, the publication of January inflation data was delayed, which the agency said was due to a change in the base year for calculations to 2020.

This meant that Eurostat, the EU’s statistical agency, had to estimate price growth in Europe’s biggest economy to calculate inflation for the entire eurozone. Germany accounts for about a quarter of all price data used to calculate inflation in the eurozone.

Any change in January’s eurozone readings could change perceptions of how quickly price pressures are easing in the region and change expectations about when the European Central Bank will stop raising interest rates.

Calculating German inflation is complicated by the role of government subsidies designed to soften the impact of rising energy prices on households. In December, the country paid the gas bills of most German households. It was a one-time payment, and therefore, in January, consumer bills for energy carriers increased again.