"A higher inflation rate was last recorded in October 2008 with a gain of 2.4 percent," the German Statistics Office said in a statement, confirming the 2.0 percent year-on-year rise in the harmonised index of consumer prices (HICP).
Germany's HICP differs from the headline consumer price index (CPI) mainly in the treatment of housing costs, since statisticians need to adjust their models to account for the lower level of home ownership versus other euro zone countries.
Separately, the bureau reported wholesale prices recovered all the declines from the global economic crisis, after increasing at a 9.4 percent annual rate last month.
"The January 2011 wholesale price index exceeded the level from July 2008, reaching the highest level ever recorded," it said.
For years, a low-inflationary environment in Germany has exerted downside pressure on the euro zone's overall HICP rate, since it accounts for just over a quarter of the weighting.
Should German inflation maintain a 2 percent annualised pace in the coming months, economists warn it may very well force the European Central Bank to raise benchmark rates sooner rather than later in order to ensure price stability.
It would also likely push German government bond yields higher, adding to the interest payments it will have to pay on 302 billion euros in new debt it plans to issue this year.
Soaring energy and food prices around the world, which some economists believe is partly due to the Federal Reserve's recent round of quantitative easing, has already prompted China to raise its interest rate and helped trigger civil unrest in northern Africa.