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Germany’s Inflation Slows to 1.8% in December as Energy Costs Fall

Underlying prices stayed firmer in services, pointing to wage-driven pressure.

Overview

  • The Federal Statistical Office reported a 1.8% year-over-year rise in consumer prices in December and a 2.2% inflation rate for 2025 as a whole.
  • Cheaper energy led the late-year pullback, with energy prices down 2.4% over 2025 and household energy and fuels 1.3% lower in December.
  • Within energy, light heating oil fell 3.6% in December and electricity declined 1.8%, easing headline inflation.
  • Core inflation remained above the headline rate, at 2.8% for 2025 and about 2.4% in December, indicating persistent underlying pressure.
  • Services rose roughly 3.5% in December, including an 11.4% jump in passenger transport, and economists see wages keeping inflation from staying below 2%.