German Inflation Remains at 2.0 Percent

German Inflation Remains at 2.0 Percent

The Statistical Federal Office (Destatis) has confirmed the inflation rate for June 2025 at 2.0 percent, a figure that aligns with a preliminary estimate released at the month’s end. This marks the lowest rate since October 2024, when it also stood at +2.0 percent.

In May and April 2025, the inflation rate was +2.1 percent. “The inflation rate has softened again in June, reaching the lowest level in the first half of the year” stated Destatis President Ruth Brand. “Alongside the continued decline in energy prices, a slowdown in the price increase for foodstuffs was particularly noticeable”. Brand added that prices for services continued to exert inflationary pressure. Consumer prices remained unchanged in June 2025 compared to May 2025.

Prices for energy products were 3.5 percent lower in June 2025 compared to the same month in the previous year. This marks another instance of a less pronounced decline than in preceding months (May 2025: -4.6 percent; April 2025: -5.4 percent). Specifically, fuel prices decreased by 4.6 percent year-on-year. Heating energy saw a decrease of 2.8 percent over the same period, with consumers benefitting from lower prices for firewood, wood pellets and other fuels (-5.6 percent), as well as electricity (-2.4 percent). Prices for district heating remained largely unchanged (-0.1 percent), while natural gas prices were negligibly higher (+0.1 percent).

Food prices were 2.0 percent higher in June 2025 compared to the previous year – bringing the inflation rate for food back to the overall inflation rate. This contrasts with a +2.8 percent increase observed in May. From June 2024 to June 2025, fruit prices saw the most significant increase (+7.4 percent). Prices for sugar, jams, honey and other confectionery (+5.3 percent) and dairy products and eggs (+3.6 percent) also rose significantly.

While some products experienced marked price increases (e.g., chocolate: +17.4 percent), others saw noticeable price decreases (e.g., sugar: -28.6 percent). Others showed below-average increases, such as fish, fish products and seafood (+0.6 percent) and bread and bakery products (+0.5 percent). Conversely, vegetables were noticeably cheaper (-3.0 percent, including potatoes: -11.2 percent).

The inflation rate excluding energy stood at +2.6 percent in June. The inflation rate excluding food and energy – often referred to as core inflation – was +2.7 percent. Both metrics have remained above the overall inflation rate since January 2024, underscoring that inflation persists in other key areas.

Service prices as a whole were 3.3 percent higher in June compared to the previous year, a slight decrease from the +3.4 percent increase in May. From June 2024 to June 2025, prices increased particularly for combined passenger transport (+11.4 percent), services of social institutions (+8.5 percent) and insurance (+8.1 percent). Above-average price increases were also recorded for stationary healthcare services (+6.5 percent) and the maintenance and repair of vehicles (+5.6 percent).

Other services also became more expensive, including water supply and other services for households (+4.1 percent), visits to restaurants (+4.1 percent) and package holidays abroad (+3.8 percent). Net cold rents remained significant for price developments in services with a rise of +2.0 percent. Conversely, only a few services were cheaper than in the previous year, such as telecommunications (-1.4 percent) and airline tickets (-1.3 percent).

Overall goods prices increased by 0.8 percent from June 2024 to June 2025, a decrease from the +0.9 percent increase in May. Consumer goods prices rose by 1.1 percent, while durable goods increased by 0.5 percent. Alongside food prices (+2.0 percent), other goods saw significant price increases including non-alcoholic beverages (+7.9 percent, including coffee and similar products: +19.8 percent), tobacco products (+6.4 percent) and passenger cars (+4.0 percent). Price decreases were observed in areas excluding energy (-3.5 percent), including mobile phones (-7.1 percent), information processing equipment (-3.8 percent) and clothing articles (-0.5 percent).

The consumer price index remained unchanged in June compared to May, Destatis reported. With the start of the summer season, package holidays abroad (+6.3 percent) and airline tickets (+4.9 percent) became more expensive. Overall energy prices remained consistent with the previous month (0.0 percent). Light heating oil increased (+3.5 percent), while firewood, wood pellets and other solid fuels decreased (-0.5 percent). Food prices overall decreased (-0.5 percent, including vegetables: -2.2 percent; fruit: -0.8 percent). Prices for clothing articles (-1.9 percent) and shoes and accessories (-0.8 percent) also fell.