German inflation drops to near 3 year low of 1.2 per cent driven by drop in fuel prices

BERLIN – Inflation in Germany, Europe’s largest economy, has hit its lowest rate in nearly three years largely on the back of a fall in fuel costs.

The Federal Statistical Office said Tuesday that consumer prices rose 1.2 per cent in April 2013 compared to the same month a year ago. That’s down on the 1.4 per cent rate in March and takes inflation to its lowest level since August 2010 when prices rose 1 per cent.

The European Central Bank’s target is to achieve inflation of just below 2 per cent across the economy of the 17 European Union countries that use the euro. In April, eurozone inflation fell to 1.2 per cent — a drop that was largely behind the ECB’s decision to cut its benchmark interest rate to a record low of 0.5 per cent.