Germany's Inflation Rate Declines as Food and Energy Prices Stabilize

January inflation drops to 2.3% from 2.6% in December, with food price increases slowing and energy costs falling.

Germany's inflation rate fell to 2.3% in January 2025, marking the first decline after three consecutive increases.
Food prices rose by only 0.8% year-over-year in January, a significant slowdown compared to December's 2.0% rise, though some items like butter saw steep price hikes of over 30%.
Energy costs decreased by 1.6% year-over-year, with lower prices for heating oil and electricity offsetting increases in gas and district heating costs.
Despite the easing inflation, many consumers perceive price increases to be much higher, with a survey showing an average perceived inflation rate of 15.3% for 2024 versus the actual 2.2%.
Services such as insurance and restaurant visits continue to see above-average price increases, contributing to a 4.0% rise in service costs overall.