Berlin, Feb 27 (IANS): Driven by a sharp drop of energy prices, German annual inflation falls to zero in February, fuelling speculations that the European Central Bank (ECB) would further loosen its monetary policy next month.

Compared with the previous year, consumer price index (CPI) in Germany remained unchanged in February, said German federal statistics office Destatis on Friday, Xinhua news agency reported.

In January, consumer prices in Europe's biggest economy rose by 0.5 percent annually.

The main factor behind the stagnation was energy prices which dropped by 8.5 percent, according to Destatis.

Measured with the harmonized consumer price index (HICP), for comparison with other European countries, German annual inflation fell back to a negative territory after nearly a half year. In February, the German HICP inflation went down to minus 0.2 percent, the lowest level since January 2015.

The ECB sees an inflation rate of "below, but close to" 2 percent as being healthy for the economy. The German figures on Friday added pressure on the central bank for more measures to lift prices.

The ECB has cut a benchmark interest rate to minus 0.3 percent, charging commercial banks for placing their extra money at the central bank instead of lending out. Every month, it injects 60 billion euros ($65.5 billion) into the market via purchasing bonds and securities.