Services remained the biggest price driver at the end of the year: they rose in price again by 3.5 percent. However, consumers had to pay 1.3 percent less for energy than a year before. Food prices rose by 0.8 percent. The inflation rate excluding food and energy, the so-called core inflation, was 2.4 percent.
Inflation in 2025 at 2.2 percent
Last year as a whole, consumer prices rose by an average of 2.2 percent. That was it Inflation rate at the same level as in 2024, as the Federal Statistical Office announced based on preliminary figures.
According to a forecast by the Leibniz Institute for Economic Research (Ifo), the inflation rate is likely to be 2.2 percent this year and 2.3 percent in 2027. The Kiel Institute for the World Economy (IfW) forecasts a decline to 1.8 percent for 2026. Consumers can benefit from the elimination of the gas levy and lower network fees.
The European Central Bank (ECB) aims for inflation of two percent in the medium term. The German inflation rate, calculated according to European standards, was exactly 2.0 percent in December. The ECB lowered its key interest rate eight times from mid-2024 to mid-2025 to the current two percent because overall price pressure has eased. Most experts assume that it will not change its key interest rate in the coming months.
