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Germany: Inflation rose to 2.6% in December

January 6, 2025

Germany has struggled with rising prices due to the impacts of the COVID-19 pandemic and Russia's invasion of Ukraine. The German figures come one day before the eurozone will release its December inflation numbers.

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A symbolic photo of Euro bills, the currency used in Germany
High inflation in Germany is hurting consumers, with Europe's largest economy facing significant challenges Image: Burkhard Schubert/Future Image/IMAGO

Germany's inflation rate climbed to 2.6% year-on-year in December, faster than expected, according to preliminary data published Monday.

The annual inflation rate was 0.4% higher than in November, figures from federal statistics agency Destatis showed.

Energy prices fell by 1.7% compared with the previous year, while food prices rose 2% year-on-year in December, data from the statistics office showed.

Consistent rise in inflation since September

Core inflation excluding food and energy rose to 3.1% in December, up from 3% in November, 2.9% in October and 2.7% in September.

That figure, which excludes two of the more volatile sectors, is regarded by many economists to be the most reliable representative of real inflation.

One driver in the overall upward figure was on goods, which had fallen to 0.3% in September but rose in total to 1.1% in December.

Inflation in the service sector remained stubbornly high, nudging up slightly from 4% to 4.1% from November to December.

How has inflation behaved previously?

The 2020 COVID-19 pandemic's impact on supply chains and the 2022 invasion of Ukraine by Russia resulted in large spikes in prices in Germany. The Russian invasion forced the German government to wean itself off Russian gas, prompting higher energy costs in Germany. 

Germany saw inflation rise to 6.9% in 2022 and hover at 5.9% in 2023, the highest rates since reunification in 1990. 

Despite the continuing fall in power and fuel costs, overall inflation has remained sticky.

km/wd (dpa, Reuters)