The news raises hopes for another rate cut from the European Central Bank, with the policy committee set to meet this Thursday.
ADVERTISEMENTGermany's annual inflation rate fell to 2% in August, its lowest level since March 2021, final harmonised data confirmed on Tuesday.
The total is adjusted for comparison across different EU countries, while the non-harmonised yearly figure stood at 1.9%.
Month-on-month, the harmonised inflation rate came in at -0.2% in August, while the non-adjusted figure was recorded at -0.1%.
Tuesday's data confirms preliminary results.
"Falling energy prices slowed inflation more significantly in August than in the previous months," said Ruth Brand, President of Germany's Federal Statistical Office.
"On the other hand, price increases for services, which are still above average, drove inflation up."
Energy prices fell by 5.1% year-on-year, while the cost of services was up 3.9%.
Food prices were up 1.5% compared to August 2023 and accelerated on a year-on-year basis for the fifth consecutive month.
The 2% rate of annual inflation means that prices are still rising, but at a slower pace.
The data will likely encourage the ECB to cut interest rates again at their next meeting, set for this Thursday.
In June this year, the bank lowered borrowing costs after an aggressive rate hike cycle that began in summer 2022.
Slowing price increases and low growth are signs that the eurozone can handle economic stimulus without triggering an inflationary spike.
