Stable Inflation Rate in Germany Records 2.0% in July 2025
In July 2025, inflation in Germany remained steady at 2.0% year-on-year, marking the lowest level in eight months. This stability is attributed to shifting trends in energy, food, and services prices.
Energy prices continued to decline, contributing to a decrease in overall inflation. Compared to the same month last year, energy prices dropped by approximately 3.4%, with significant reductions in motor fuels (-4.5%), household energy (-2.6%), and heating oil, electricity, firewood, and wood pellets[1][5].
However, food prices inflation rose slightly to around 2.2% annually. This increase was due to higher costs for fruit (+7.6%), sugar and confectionery (+5.6%), and dairy products (+4.1%)[2][5].
Services prices remain the primary driver of inflation, increasing by about 3.1% year-on-year. Although this rise eased slightly from 3.3% in June, it remains above average and is largely due to higher wages and significant increases in specific service categories like passenger transport (+11.3%), parcel services (+9.0%), and social facilities (+8.2%)[2][5].
Core inflation, which excludes volatile food and energy prices, stands at 2.7%, unchanged from June, indicating sustained underlying inflation pressure[2][5].
In summary, while falling energy prices have a disinflationary effect, rising services and food prices continue to exert upward pressure on Germany's inflation rate, resulting in the overall stabilization of inflation around 2% in mid-2025[1][2][4][5].
- Overall service prices in July 2025 were 3.1% higher than the same month last year.
- Ruth Brand, President of Destatis, stated that the inflation rate has remained unchanged for two months since the beginning of the year.
- Overall food prices remained virtually stable (-0.1%) in July compared to the previous month.
- The inflation rate excluding food and energy, or core inflation, remained at +2.7% in July.
- The prices for fuels decreased by 4.5% year-over-year.
- Energy prices as a whole rose by 0.4% compared to the previous month in July.
- Postal and parcel services prices rose by 9.0% between the same periods.
- International flights were 6.8% cheaper in July 2025 compared to the same month last year.
- The inflation rate had been 2.0% in June 2025 as well, and had been 2.1% in May and April.
[1] Federal Statistical Office (Destatis) [2] German Federal Ministry of Finance [4] German Federal Ministry for Economic Affairs and Climate Action [5] Source: Destatis, Statistisches Bundesamt, Germany
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