German inflation has slowed from its highest level in decades, supporting the European Central Bank's view that the eurozone's record consumer-price growth will ease without the need for interest-rate hikes.
Prices rose 5.7% year on year in December, according to a European Union-harmonized measure, down from the previous month's 6% increase, according to data released Thursday. A major newswire polled economists, who predicted a rate of 5.6%.
The reading adds to signs that the currency bloc's price pressures are easing after a surge caused by supply-chain disruptions and an increase in energy costs. After a report showed consumer prices in Europe's second-largest economy stabilizing, Bank of France Governor Francois Villeroy de Galhau said this week that inflation is nearing its peak.
While inflation in Spain and Italy increased last month, euro-region data due Friday are expected to show a slight slowing to 4.8%.
The recent slowdown in Germany was caused by lower energy prices. Food prices rose at a faster rate at the same time.
Even if inflation slows, the Bundesbank forecasted last month that it will remain above 2% through 2024. Price growth is expected to slow further at the start of this year as a temporary sales-tax cut in the second half of 2020 reduces the comparison base, though the effect of the coronavirus's omicron strain on inflation is unknown.