Declining inflation in several states

BERLIN (Reuters) – Inflation in six major German states fell in December for a second straight month, statistics showed on Tuesday, suggesting that domestic price inflation may also have eased thanks to government support.

In Germany’s most populous state, North Rhine-Westphalia, inflation rose to 8.7% over a year against +10.4 in November.

The inflation rate reached 9.2% in Bavaria, 8.1% for Hesse, 9.1% in Brandenburg, 8.7% in Saxony and 8.5% in Baden-W├╝rttemberg, also reflecting a slowdown there.

The data from these six states is used to calculate the preliminary estimate of German inflation, which will be published at 13:00 GMT.

Economists polled by Reuters ahead of the release of the state figures expect inflation to average 10.7% for the last month, after 11.3% in November.

The state’s repayment of household energy bills in December and the capping of gas and electricity prices are part of the initiatives Olaf Scholz’s government has taken to protect consumers.

The Bundesbank expects inflation to ease in December, its president Joachim Nagel said last month, adding that it will remain around 7% in 2023 before falling significantly in 2024.

According to the latest forecast from the German central bank, inflation is now expected to be 7.2% in 2023 and 4.1% in 2024.

(Miranda Murray, French version Laetitia Volga, Editing by Kate Entringer)

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