German inflation seen down to 2.1 pct in December

The figure reported Thursday by the Federal Statistical Office compares with a 2.4 percent year-on-year increase in consumer prices in November. The office says inflation this year has been driven largely by energy and fuel prices, but gave no reason for the dip in December.

But when compared with November 2011, prices in December rose by 0.7 percent, largely because of pre-Christmas seasonal effects.

Data from Germany are important as the European Central Bank weighs whether to cut interest rates for the 17-nation eurozone further amid worries the region's economy could slide into recession.

The bank has cut its benchmark refinancing rate from 1.5 percent to 1 percent since early November.