PARIS

Inflation in France became negative in January, the national statistics agency said in a statement on Thursday. 

Prices declined by 0.4 percent in January compared with the same month last year, the statement said. 

"France has not seen negative inflation since October 2009, when the consumer price index dropped 0.2 percent," the agency noted on its report.

The agency explained that the decline in consumer prices is a result of a 1.4 percent drop in the cost of manufactured goods particularly, due to the winter sales, and by a 7.1 percent drop in energy prices.

Germany also recorded an 0.4 percent price decline last month. 

Prolonged periods of negative inflation can lead to deflation, an extended period of slow economic growth. 

The fall in inflation in the eurozone is linked to the sharp drop in oil prices, as well as to the sales in France in January, the agency said.

But it is also linked to a weak economy in the 19-nation zone, with weak demand.

Deflation can keep an economy sluggish, as consumers tend to delay purchases in the expectation of eventually buying them cheaper. The result is lack of demand, and poor profit for businesses.