German Inflation Falls Sharply as EU Zone Awaits ECB Decisions

Inflation in Germany saw a sharper decline than anticipated in December, dropping to 2.0% year-on-year. Core inflation also decreased slightly, just before the eurozone's inflation report. The rate hovers near the European Central Bank's target, with expectations of no imminent interest rate changes.

Germany's inflation rate experienced a more significant reduction than analysts predicted in December, according to preliminary figures released by the federal statistics office. The annual inflation rate dropped to 2.0%, falling short of the 2.2% forecast by analysts surveyed by Reuters.

Core inflation, which omits the more volatile sectors such as food and energy, decreased to 2.4% from 2.7% the previous month. This data comes just ahead of the anticipated eurozone inflation report set for release on Wednesday.

Inflation across the eurozone has stabilized around the European Central Bank's 2% benchmark, primarily buoyed by service sector price increases. Analysts generally predict that the ECB will maintain current interest rates for the foreseeable future.

(With inputs from agencies.)