German September CPI falls 0.2% as VAT cut drives down prices

German September consumer prices fell 0.2% month on month and against the same month last year, the federal statistics agency Destatis said on Tuesday.

It added that inflation fell into negative territory for the second time this year, hitting -0.2%.

Consumer prices fell 0.4% on month and on year in EU-harmonized standards, also in line with forecasts.

Destatis said a temporary cut in value-added tax, implemented on July 1 as part of the German government's coronavirus stimulus package had driven down prices and inflation.