Latest consumer price data from Germany's most populous state today confirmed inflation in Europe's largest economy is easing again.
North Rhine-Westphalia's (NRW) consumer price inflation slowed to 0.4 per cent month-on-month in February from 0.8 per cent in January, with the annual rate easing to 1.5 per cent from 1.8 per cent, the state's statistics office said.
Analysts said the NRW data, which followed similar reports of slowing inflation from the states of Hesse and Saxony last Friday, indicated prices were returning to normal levels.
"I was surprised to see that food prices fell (month-on-month), whereas they normally rise in February. This indicates a process of normalisation in prices after January's strong rise," said Mr Volker Nitsch, an economist at Bankgesellschaft Berlin.
The euro showed no reaction to the data, holding steady against the dollar at $0.8738 early this morning.
Food prices fell 0.3 per cent month-on-month in February, in sharp contrast to the jump of 2.2 per cent recorded in January. Inflation in January was also boosted by higher taxes on energy and insurance as well as some euro-induced price hikes.
The annual rates of inflation in Hesse and Saxony slowed to 1.7 and 1.6 per cent, respectively, from 2.1 and 2.3 per cent. Month-on-month, prices rose 0.3 per cent in Hesse and held steady in Saxony.
Mr Nitsch said the NRW data were consistent with the consensus forecast for a pan-German inflation rate of 0.3 per cent month-on-month and 1.8 per cent on the year.
"There was great uncertainty ahead of the February data, but the figures have turned out to be rather unspectacular," he said.