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German Non-Harmonized Inflation Rate Declined to 2% in January

Jan. 30 (Bloomberg) -- German non-harmonized inflation slowed in January.

The inflation rate eased to 2 percent from 2.1 percent in December, the Federal Statistics Office in Wiesbaden said today. The office delayed publication of data calculated using a harmonized European Union method, citing new EU standards. Economists forecast that the harmonized inflation rate increased to 2.4 percent from 2.3 percent, according to the median of 23 estimates in a Bloomberg News survey.

“Within the next few months inflation should come down below the 2 percent mark,” said Alexander Krueger, chief economist at Bankhaus Lampe KG in Dusseldorf. “Even though the economy shrank in the last quarter, the signs are that we’ll avoid a technical recession.”

The International Monetary Fund last week cut its forecast for 2012 economic growth in Germany, Europe’s largest economy, to 0.3 percent from 1.3 percent as the sovereign debt crisis threatens to tip the euro region into recession. At the same time, Bundesbank President Jens Weidmann said the economy is experiencing a “temporary weak phase” and should return to robust growth later in the year.

Euro-area inflation will remain at 2.7 percent this month, according to the median of 38 estimates in another Bloomberg survey. That report will be released on Feb. 1.

The European Central Bank kept its benchmark interest rate unchanged at a record low of 1 percent this month after two reductions. President Mario Draghi said while the economy is showing “tentative” signs of stabilizing, “cost, wage and price pressures in the euro area should remain modest.”

To contact the reporter on this story: Jeff Black in Frankfurt at jblack25@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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