FRANKFURT (AFP) - Germany saw flat inflation in August, which could feed into a European Central Bank decision to deploy more monetary stimulus as soon as next week.
Preliminary figures from Germany's federal statistics office Destatis showed that inflation remained steady at 0.4 percent this month, the same as in July, as measured using the consumer price index preferred by the German government.
The result was just below the 0.5 percent predicted by analysts surveyed by Factset, and remains far off the ECB target of just under 2.0 percent.
Using the Harmonized Index of Consumer Prices (HICP) barometer preferred by the European Central Bank, inflation stood at 0.3 percent in August, slightly lower than July's 0.4 percent.
"While inflation should pick up in the coming months, we do not think that it is on track to reach the ECB's near-2.0 percent target on a sustained basis," Jack Allen of Capital Economics wrote.
Mixed expectations for economic growth visible in recent surveys of German businesses and investors and low inflation expectations among consumers all point to price growth peaking in the coming months before falling back, he added.
Meanwhile, inflation is "far weaker elsewhere" in the eurozone, Allen noted, pointing especially at Spain, which on Tuesday released data showing headline inflation remains negative.
"The ECB has reason to increase its policy support, perhaps as soon as next week."
ECB governors are set to meet on September 8 for the second time since Britain voted to quit the EU in late June.
President Mario Draghi announced no change to the ECB's program of government and corporate bond buying, cheap loans to banks and negative interest rates following the early July gathering.
He insisted at the time that the bank was "ready, willing and able" to intervene if necessary.
The bank's board will have more hard economic data and their own staff projections to work from in September.
Tuesday's inflation data were a preliminary flash estimate based on consumer price data for six of Germany's 16 regional states.
Final data based on all 16 states will be published on September 13.