German deflation confirmed at 0.7% in December 2020

Annual harmonized inflation in Germany was confirmed at negative 0.7% in December 2020, unchanged from November 2020, final data from the country's Federal Statistical Office showed.

The latest print was in line with the flash estimate.

Nonharmonized consumer prices fell 0.3%, also in line with the initial forecast, marking the fifth time in 2020 that the inflation rate fell below 0%, the statistics office said.

A reduction in value-added tax, implemented July 1, 2020, as part of the government's stimulus package, continued to affect consumer prices compared with a year earlier, the office said.

Goods prices declined 1.8% on an annual basis in December 2020, while energy prices dropped 6.0%. Services prices rose 1.1% year over year, and food prices rose 0.5%.

On a monthly basis, harmonized prices rose 0.6%, while nonharmonized prices added 0.5%.

Harmonized consumer prices rose 0.4% on an annual average in 2020 compared with 2019, while nonharmonized prices gained 0.5% on average.