For the time being, no further relaxation in Germany: In February, consumer prices, as in January, were 2.3 percent above the level of the previous year, as the Federal Statistical Office used to calculate on the basis of preliminary data for inflation.
In the federal states, the development was inconsistent on how the communications of the statistical state offices can be found: While North Rhine-Westphalia reported an inflation rate, which has sunk to 1.9 percent, annual inflation in Baden-Württemberg in February climbed to 2.5 percent, Saxony-Anhalt even 3.0 percent inflation.
Rising consumers: Inner prices from January to February 2025
At the beginning of the year, the price survival in Germany, contrary to the expectation of many economists, had lost speed after three climbs in a row. In December, the inflation rate was still 2.6 percent. From January to February of the current year, goods and services were 0.4 percent of the Wiesbaden statisticians by 0.4 percent.
Encouraging: The inflation rate without the prices for energy and food that is prone to fluctuation decreased to 2.6 percent in February. In January, this so -called core inflation, which in the opinion of many economists, portrays the inflation trend better than the overall rate, is still 2.9 percent.
Economists: Inflation expect the inflation in the course of the year
The fear of rising costs for daily life always name consumers in surveys as one of their greatest concerns. Higher inflation rates reduce people’s purchasing power because they can then afford less for one euro.
After the Russian attack war against Ukraine three years ago, the prices for energy and food had risen rapidly. The inflation rate in Germany climbed up to 8.8 percent in autumn 2022.
The large wave of inflation is broken. Many economists expect inflation to decrease further in Germany. For the current year, economists forecast an average rate of inflation of just over two percent and thus a level similar to 2024 with 2.2 percent.
“Have to get used to a higher price level”
The Bundesbank also expects further relaxation: “We (…) assume that the downward trend is intact and that inflation will continue to decrease in Germany,” said Bundesbank President Joachim Nagel recently. “We expect a sustainable return to the two percent brand in Germany in 2026.”
In the medium term 2.0 percent inflation, the monetary authorities of the European Central Bank (ECB) see their main goal of stable prices and thus a stable currency in the euro area. This value is far enough from the zero brand. Because permanently low prices, as well as too rising prices, are a risk of the economy: Companies and consumers could postpone investments in the expectation that it will soon become even cheaper.
Even if individual prices drop again, according to the Bundesbank President Nagel, people in Germany have to “get used to a higher price level”. Place of scope for price increases in particular see industry and retail, as the latest survey by the IFO Institute showed. Its economic director Timo Wollmerhäuser expects inflation in Germany “for the time being above the target value of the European Central Bank”.
Price development in February
In February, refueling and heating was cheaper than a year earlier, according to the Federal Statistical Office. Energy was reduced by 1.8 percent and thus somewhat stronger than in January and in December (minus 1.6 percent each).
In contrast, food prices attracted more clearly: in February, prices were 2.4 percent above the level of the previous year’s month, in January it was only 0.8 percent.
Services such as car repairs or visits to the restaurant were more expensive, as in the previous months, by 3.8 percent. At least the price lift in February weakened somewhat.