BERLIN, Jan 6 (Reuters) - German annual inflation rose more than forecast in December due to higher food prices and a smaller drop in energy prices than in previous months, preliminary data from the federal statistics office showed on Monday.
The annual consumer price inflation rate rose to 2.9%, higher than the 2.6% forecast by analysts polled by Reuters and speeding up from 2.4% in November, based on data harmonised to compare with other European Union countries.
"Last year ended with unpleasant news on the inflation front," said Joerg Kraemer, chief economist at Commerzbank, noting that the inflation problem has not been solved.
He added that inflation is likely to be similarly high in January due to higher prices for CO2 emissions and insurance services.
Economists pay close attention to national inflation data, as Germany publishes its figures one day before the euro zone inflation data release.
Euro zone inflation is expected to have risen to 2.4% in December from 2.2% in November.
The European Central Bank expects inflation to settle at its 2% target this year after hitting double digits in the wake of Russia's full-scale invasion of Ukraine in 2022.
"The ECB's target will be missed by a wide margin," said Ralf Umlauf, senior economist at Helaba, in response to the German figure. "Expectations of ECB interest rate cuts should not be given any new impetus."
The annual average inflation rate in Germany is expected to stand at 2.2% in 2024, the statistics office said, well down from 5.9% the previous year.
Core inflation, which excludes volatile food and energy prices, went up to 3.1% from 3.0% in November.
Energy prices fell by 1.7% compared with the previous year, while food prices rose by 2.0% year-on-year in December, data from the statistics office showed.
Services inflation inched up to 4.1% in December from 4.0% in the two previous months.
Reporting by Maria Martinez, Additional reporting by Klaus Lauer, Writing by Friederike Heine, Editing by Miranda Murray
Source: Reuters