Germany’s inflation rate exceeded expectations in December, climbing to 2.9%, according to preliminary data released on Monday by the federal statistics office. This marked an uptick from November’s annual rate of 2.4%, based on harmonized data designed for cross-country comparison within the European Union.
Economists surveyed by Reuters had predicted a smaller increase, with inflation projected to reach 2.6% for the month. However, the December figures reflect sustained price pressures within Europe’s largest economy. Core inflation, which excludes volatile components like food and energy, also rose slightly to 3.1% in December, up from 3.0% the previous month.
In a breakdown of key components, energy prices fell by 1.7% compared to the previous year, while food prices recorded a 2.0% annual increase, the statistics office reported.
Inflation data from Germany often garners close scrutiny as it precedes the release of broader euro zone inflation figures. Analysts expect euro zone inflation to rise to 2.4% in December, up from 2.2% in November.
The European Central Bank (ECB) has maintained that inflation across the bloc will stabilize at its 2% target in 2025. This comes after a period of extreme price surges in the aftermath of geopolitical disruptions, including Russia’s large-scale invasion of Ukraine in 2022, which contributed to sharp spikes in energy and commodity prices.
As policymakers and markets digest these figures, the data underscores ongoing challenges in containing inflationary pressures while navigating external shocks to the economy.
