German inflation dropped to the lowest level in four years in May, official data showed on Friday, raising concerns of deflation risks in the euro zone.

Compared with the same month of previous year, consumer prices in the Europe's largest economy increased by 0.9 percent in May, down from an annual inflation rate of 1.3 percent in April, German Federal Statistical Office (Destatis) said, adding that it was the lowest inflation rate since June 2010.

Energy prices were attributed as the main reason for the drop. Compared with May 2013, energy prices in Germany declined by 0.8 percent. Food prices, meanwhile, grew slightly by 0.5 percent year-on-year, and stood below the overall inflation rate for the first time in three years, said Destatis.

Inflation rate in Germany and the overall euro zone remained below the target of the European Central Bank, worrying economists about deflation risks in the common currency area, and forcing ECB to cut interest rate earlier this month.

Measured by harmonized index of consumer prices (HICP), ECB's yardstick, German annual inflation in May declined to 0.6 percent from 1.1 percent in April, and stood at the lowest level since February 2010.

According to European Union's statistical office, annual inflation in euro zone was down to 0.5 percent in May from 0.7 percent in April, far below ECB's maintenance target of 2.0 percent. Endi

Go to Forum >>0 Comment(s)