Destatis official inflation report for January 2025

German Inflation Hits 2.9% in December, Surpassing ECB Target for Third Month

Jan 6, 2025, 01:11 PM

German inflation rose more than expected in December, reaching 2.9% year-over-year, according to the country's statistics office, Destatis. This marks the third consecutive month that inflation has exceeded the European Central Bank's (ECB) target of 2%. The increase was higher than the consensus forecast of 2.6% and follows a rise from 2.4% in November, 2.2% in October, and 1.6% in September. For the full year of 2024, the average inflation rate in Germany was 2.2%, a significant decrease from the previous years. The reacceleration of inflation in December has raised concerns about potential stagflation, with experts suggesting that the ECB might need to adjust its interest rate strategy cautiously due to the higher-than-expected inflation rate attributed to less favorable energy base effects, while wage increases and rising service costs continue to exert pressure on prices.