German annual inflation increases in December

Official figures have shown that Germany’s annual inflation has accelerated slightly in December 2013 and is expected to see an increase for the New Year.

Three federal state reports on Monday showed an annual inflation increase of 1.3 percent for the month of December 2013.

In the German Bellwether state of North Rhine-Westphalia, the cost of living increased by 1.8 percent in December, after rising to 1.6 percent in November.

In the financial powerhouse state of Hesse, the annual inflation rose to 1.2 percent in December from 1.1 percent in the previous month.

Meanwhile in the German state of Saxony, annual inflation remained unchanged at 1.4 percent.

According to a Reuters’ poll of economists, Pan-German consumer price inflation is seen speeding up to 1.4 percent on the year in December from the 1.3 percent in November.

Berlin said in October that it expects annual inflation to accelerate over the coming years, with consumer prices rising 1.8 percent in 2014 after gaining 1.5 percent in 2013.

Experts predict that, Germany, which has consistently outperformed its European neighbors, may see inflation accelerating to 2.5 percent next year due to low European Central Bank interest rates that could cause the economy to “overheat.”

Europe plunged into financial crisis in early 2008. The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.