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Germany Inflation Falls in April

May 13, 2002

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FRANKFURT, Germany (AP) _ Inflation in Europe’s biggest economy dropped to 1.6 percent in April, its lowest rate in nearly two years, the government said Monday.

The Federal Statistics Office said preliminary figures showed that inflation dropped from 1.8 percent in March, a drop credited largely to lower fuel prices.

The last time inflation was lower was in May 2000, when the year-to-year increase was 1.4 percent.

Inflation data from Germany is critical to decisions by the European Central Bank on interest rates. Higher rates can stem price rises but also tend to put a brake on economic growth.

The ECB last cut rates on Nov. 8. Since then it has left rates alone, waiting to see more evidence of economic recovery. Most economists don’t expect further rate increases until the second half of the year, when growth in countries including Germany is expected to pick up.

The German statistics office said prices increased by 0.1 percent in the month from March.

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