Overview

• Germany's inflation rate eased to 2.1% in April 2025, marking its lowest level since October 2024, according to preliminary data from the Statistisches Bundesamt.
• Energy prices dropped sharply by 5.4% year-on-year, driven by falling global oil prices amid U.S. trade tensions impacting demand.
• Core inflation, which excludes volatile food and energy costs, rose to 2.9% in April, up from 2.6% in March, signaling persistent underlying price pressures.
• Food prices increased by 2.8% year-on-year, though consumer surveys reported a 2.5% month-on-month reduction in grocery costs, with notable price drops for some vegetables like paprika.
• The European Central Bank is considering further rate cuts as it navigates economic uncertainty linked to U.S. tariffs and global trade disruptions.