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Consumer prices in Germany rose by 2.2% in 2025, unchanged from 2024, official estimates showed on Tuesday, as pressure on household budgets continued to ease after several years of elevated inflation.<\/p>\n
In December, the inflation rate dropped to 1.8% year-on-year, compared to 2.3% in November, according to preliminary data from the Federal Statistical Office.<\/p>\n
Economists expect inflation to remain above the 2% mark in 2026, after Europe\u2019s largest economy struggled to recover from the surge in prices triggered by the coronavirus pandemic and Russia\u2019s invasion of Ukraine in February 2022.<\/p>\n
With the cost of energy soaring, Germany saw inflation reach 6.9% in 2022 and remain at 5.9% in 2023, the highest rates since reunification in 1990.<\/p>\n
In 2024, the inflation rate was back at 2.2% year-on-year.<\/p>\n
The ifo Institute, a leading economic think tank based in Munich, projects inflation to remain at 2.2% in 2026, before climbing to 2.3% in 2027.<\/p>\n
Higher inflation rates reduce the purchasing power of consumers, who are able to afford less for every euro.<\/p>\n
The European Central Bank, in charge of monetary policy in the 21-member eurozone, is aiming for medium-term inflation of 2% to keep prices stable.<\/p>\n
Food price inflation slows<\/strong><\/p>\n Higher costs for insurance, restaurants and other services were among the main drivers behind inflation in 2025, with prices for services up by 3.5% in December, mainly due to rising wages, the costs of which many companies pass on to consumers.<\/p>\n Real wages, which have been adjusted for inflation, have been rising in Germany for over two years.<\/p>\n Prices for food were up by 0.8% year-on-year in December, far below the average inflation rate.<\/p>\n Regardless, a majority of German says they noted the most severe price increases when buying food, according to a survey released on Tuesday.<\/p>\n Some 68% of the 1,000 adults questioned by pollsters Forsa in November said they felt food prices had seen the steepest rise, while 16% said they thought the costs for energy had risen the most.<\/p>\n While food price inflation has slowed, many items are considerably more expensive than they used to be before the coronavirus pandemic.<\/p>\n Experts attest healthy inflation rate<\/strong><\/p>\n In a sign of further relief, consumer prices for energy, including fuel, electricity and gas, were down 1.3% in December compared to the same month in the previous year, while remaining unchanged month-on-month.<\/p>\n Core inflation, which excludes the volatile prices for food and energy, dropped to 2.4% in December.<\/p>\n ING chief economist Carsten Brzeski said he believes inflation will remain below 2% in the first months of 2026 due to a strong euro and cheaper imports, as goods are flooding Europe due to higher US tariffs.<\/p>\n However, he said a reduction of VAT on restaurant food from 19% to 7% that took effect on January 1 is unlikely to be passed on to consumers.<\/p>\n Chief economist at Germany’s Dekabank Ulrich Kater said the development of consumer prices in the country was completely within the norm.<\/p>\n “The country has many economic problems, but inflation is not one of them,” he said.<\/p>\n The German economy contracted in 2023 and 2024, while growth was forecast to be minimal last year and no meaningful recovery is expected in 2026.<\/p>\n<\/div>\n