Preliminary German inflation slows to 1.7 pct y/y in Jan

BERLIN Jan 31 (Reuters) - German inflation eased to 1.7 percent on the year in January, according to preliminary data released on Thursday, falling back below the European Central Bank's target for price stability.

That was below the consensus forecast in a Reuters poll of 29 economists for a reading of 2.0 percent. The cost of living had risen by 2.1 percent on the year in December.

The ECB targets an inflation of just below 2 percent for the euro zone as a whole.

On a monthly basis German prices fell by 0.5 percent, after accelerating by 0.9 percent in December. The fall was below a Reuters consensus forecast for a 0.4 percent dip in prices.

Consumer prices harmonised to compare with other European Union countries showed a monthly drop of 0.7 percent and an annual rise of 1.9 percent.

The Statistics Office's preliminary inflation calculations are based on data contributed by six German states. Data for the states has not yet been released as the consumer inflation index, which currently uses 2005 as its base year, is being updated with 2010 as its new base year.

Final German price data for January are due to be released on Feb. 20, the Office said.