Inflation in key German states eases for second month

BERLIN (Reuters) - Inflation in five key German states eased for a second month in a row in December, indicating national inflation may also have slowed for a consecutive month due in part to the government's one-off payment of household energy bills.

Annual inflation in North Rhine-Westphalia, Germany's most populous state, as well as Bavaria and Brandenburg was again in the high single digits last month, while Baden-Wuerttemberg and Hesse also saw inflation ease slightly.

A one-off payment for household energy bills in December and a price cap on gas and electricity are part of government efforts to shield consumers.

The Bundesbank expects lower inflation rates in December because of the price brake, President Joachim Nagel said last month, adding that the inflation levels would remain around 7% in 2023 before retreating significantly in 2024.

According to the bank's new forecasts, inflation in Germany is now seen at 7.2% in 2023, while the 2024 figure is forecast at 4.1%.

Preliminary pan-German December data is due at 1300 GMT.

A Reuters poll of economists pointed to national inflation, harmonised to compare with other European Union countries, easing to 10.7% in December from 11.3% in November.

(Writing by Miranda Murray; Editing by Emelia Sithole-Matarise)