The German finance ministry today made a tacit appeal to the European Central Bank today to cut interest rates.
It said the current decline in German inflation improved economic conditions in the 12-nation euro zone.
"The easing of prices that we are seeing is strengthening consumer purchasing power and improving the general conditions for [euro-zone] monetary policy," the ministry said in its monthly report for August.
The ECB, which holds its first meeting after the summer break on Thursday, has until now justified its decision to leave interest rates unchanged by the risk of price increases in the euro zone. It has said its main goal is to keep inflation under control.
Figures published in mid-August showed inflation in the euro zone fell to 2.8 per cent in the 12 months to July, from 3.0 per cent in June.
In Germany, the biggest economy in the euro zone, the rise in consumer prices stagnated in the 12 months to August at 2.6 per cent, after peaking at 3.5 per cent in May.
Most analysts expect the ECB to cut its key "refi" refinancing rates on Thursday, which would give a boost to flagging growth in Europe.