German inflation confirmed at 2.6% in December #NewsGerman

German inflation rose to 2.6% year-on-year in December, authorities said on Thursday, confirming an earlier estimate.

The figure, released by the Federal Statistical Office, was up from 2.2% in November and represented the second-highest monthly rate in 2024, with only January’s 2.9% ahead.

The Wiesbaden-based agency also confirmed that prices rose in Germany by an average of 2.2% over the full year, down from 5.9% in 2023, suggesting that the wave of inflation following the coronavirus pandemic and Russia’s invasion of Ukraine has largely settled.

The latest figures were in line with preliminary data published on January 7.

They indicated that prices rose particularly quickly for services such as insurance, vehicle repair and catering in restaurants, while food prices also climbed 1.4% in 2024.

While energy costs continued to fall, down 3.2% over the full year, the decline was smaller than the 5.9% drop recorded in 2023.

Looking ahead to 2025, economists expect Germany’s inflation rate to remain above the 2% target set by the European Central Bank.

Among the drivers of short-term inflation are a rise in the country’s carbon pricing system and a hike in the subsidized national public transport ticket, known as the Deutschlandticket.

Another dramatic increase in prices as in previous years is seen as unlikely, even if US President-elect Donald Trump decides to slap heavy tariffs on European exports after his inauguration on January 20.

The Munich-based ifo Institute said that inflation could hover around 2.5% well into the new year, with companies planning to raise prices across a number of sectors.

The institute’s price expectation indicator rose from 15.8 points in November to 19.7 points in December.

Timo Wollmershäuser, head of forecasts at the institute, said “the inflation rate is expected to level off at around 2.5%.”