German consumer prices rose by 2.2% year-on-year in 2025, with inflation remaining on the same level recorded in 2024, official estimates showed, as pressure on consumers continued to ease.

In December, the inflation rate dropped to 1.8% year-on-year, compared to 2.3% in November, according to the preliminary figures released by the Federal Statistical Office.

Economists expect inflation to remain above the 2% threshold in 2026, after Europe’s biggest economy struggled to recover from years of high inflation following the coronavirus pandemic and Russia’s invasion of Ukraine in February 2022.

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.

In 2024, the inflation rate was back at 2.2% year-on-year.

The ifo Institute, a leading economic think tank based in Munich, projects inflation to remain stable at 2.2% in 2026, before climbing again to 2.3% in 2027.

Higher inflation rates reduce the purchasing power of consumers, who are able to afford less for every euro.

The European Central Bank (ECB), in charge of monetary policy in the 21-member eurozone, is aiming for medium-term inflation of 2% to keep prices stable.

Food price inflation slows

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.

A hike in Germany’s minimum wage that took effect on January 1, 2026, is also likely to have influenced inflation.

Real wages, which have been adjusted for inflation, have been rising in Germany for over two years.

Prices for food were up by 0.8% year-on-year in December, far below the average inflation rate.

Regardless, a majority of German says they noted the most severe price increases when buying food, according to a survey released on Tuesday.

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.

While food price inflation has slowed, many items are considerably more expensive than they used to be before the coronavirus pandemic.

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.

Core inflation, which excludes the volatile prices for food and energy, dropped to 2.4% in December.

– dpa