BERLIN, Jan 28 (Reuters) - Consumer prices in the German state of Saxony fell 0.5 percent month-on-month in January, outpacing a decline forecast for the whole of Germany in a sign that inflation may have slowed in Europe's largest economy.
Led by a sharp seasonal decline in the cost of holiday apartments and package holidays, annual inflation in Saxony eased to 1.2 percent from 1.3 percent this month, the eastern state's statistics office said on Wednesday.
Data from six German states generally offer the first hint of price trends across the 16-nation euro area. A Reuters poll conducted last week forecast euro zone inflation would ease to 1.4 percent in January from 1.6 percent in December.
A separate poll had predicted that Germany's national consumer price index (CPI) would show prices falling 0.3 percent on the month in January. The annual rate of inflation was seen holding at 1.1 percent.
German inflation has slowed sharply since July, and Bundesbank President Axel Weber said earlier this week that negative inflation rates were even likely in coming months.
(Reporting by Dave Graham; editing by David Stamp)