After two months of rising inflation rates, inflation in Germany has eased slightly again. At 2.3 percent, inflation remained above the two percent mark in October, according to an initial estimate published by the Federal Statistical Office on Thursday. In September the rate was 2.4 percent. From September to October of the current year, consumer prices rose by 0.3 percent, according to calculations by Wiesbaden statisticians.
Core inflation excluding volatile food and energy prices remained at 2.8 percent in October. The European Central Bank is aiming for inflation of 2.0 percent in the medium term for the entire euro zone. With such an inflation rate, the central bank sees its most important task fulfilled: ensuring stable prices and thus a stable euro.
Prices for services are rising above average
Above-average services and rising food prices have driven up the inflation rate in Europe’s largest economy in recent months. In October, people in this country had to pay 3.5 percent more for services than a year before. Food prices were 1.3 percent above October 2024 levels.
In September, services such as insurance, car repairs and bus tickets rose by an average of 3.4 percent. Food prices were 2.1 percent higher in September than in the same month last year.
Refueling and heating: relaxation in energy prices
There is some relief in energy prices: According to the Federal Office, fuel, electricity and gas were a total of 0.9 percent cheaper in October than a year earlier. In September, energy prices were 0.7 percent below the level of the same month last year.
The great wave of inflation with peaks of almost nine percent inflation that hit Germany after the start of the Russian war of aggression against Ukraine has ended. But many prices are significantly higher than a few years ago: ECB economists recently calculated that food prices in Germany have risen by more than a third (37 percent) since the pre-Corona year of 2019.
Moderate inflation rate expected for the year as a whole
According to economists, consumers in Germany will initially have to put up with inflation rates above the two percent mark. For the full year 2025, leading economic research institutes still expect a relatively moderate inflation rate of 2.1 percent – at a similar level to 2024 with 2.2 percent. Deutsche Bank currently expects an inflation rate of 2.2 percent for 2025.
ING chief economist Carsten Brzeski expects lower inflation rates, at least in the short term. For him, the factors include the strong euro and the continued favorable comparative values for energy. Rising unemployment and the use of artificial intelligence should also dampen wage growth. In the long term, however, the costs of restructured supply chains, new workers and alternative energies are likely to drive inflation in Germany.
Inflation shot up in 2022 (6.9 percent) and 2023 (5.9 percent) because energy and food became more expensive due to the war in Ukraine.