FRANKFURT: German inflation was flat in August, easing fears that Europe's biggest economy could be throttled by deflation, final data released on Wednesday by the national statistics office showed.

"The consumer price index for Germany in August 2009 remained at the same level as in August 2008," a statement issued by the Destatis office said, confirming an estimation made last month.

In July, consumer prices fell by 0.5 percent, mainly owing to lower energy costs in comparison with their spike to record levels one year earlier.

Prices for household energy and motor fuels fell by seven percent in August on a 12-month basis, while food prices were three percent lower, the figures showed.

When these volatile categories were stripped out of the calculation, Destatis said inflation would have reached a annualised 1.3 percent in August.

On a monthly basis, prices gained 0.2 percent last month from their level in July.

Concern over a possible deflationary spiral was raised as prices across the 16-nation eurozone fell by a record 0.7 percent in July, though they subsequently marked a more modest drop of 0.2 percent in August.

Deflation stomps on economic growth because businesses and households hold back on investment and consumption in anticipation of even lower prices to come, setting the stage for a downward spiral in activity and threatening jobs.

On Friday however, European Central Bank chief economist Juergen Stark said the risk of deflation in the eurozone had "virtually disappeared."