German Consumer Price Index - Economic Data Preview

The final revision of Germany’s [B]Consumer Price Index [/B]is expected to show that the annual inflation rate came to a standstill in June. Leading indicators point to continued weakness ahead: producer prices have fallen to the lowest in over two decades, foreshadowing lower consumer prices ahead as lower wholesale costs are reflected in the final price tag. This suggests inflation is set to dip into negative territory in coming months, threatening the Euro Zone’s largest economy with the onset of deflation. Such a development is all but certain to take the currency bloc as a whole along the same trajectory, threatening to commit the region to long-term stagnation as consumers and businesses are encouraged to wait for the best possible bargain and perpetually delay spending and investment.