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German Inflation Hits 2.6% in December; Harmonized CPI at 2.9%, Highest Since January 2024

Jan 6, 2025, 01:07 PM

German inflation accelerated more than anticipated in December 2025, with the Consumer Price Index (CPI) rising 2.6% year-on-year, surpassing the forecasted 2.4% and the previous month's 2.2%. The CPI has increased from 1.6% in September, highlighting a steady rise in price levels. The Harmonized Index of Consumer Prices (HICP), the European Central Bank's preferred measure, increased by 2.9% year-on-year, exceeding the expected 2.6% and up from 2.4% in November. On a monthly basis, the CPI rose 0.4%, higher than the expected 0.3%, while the HICP climbed 0.7%, above the anticipated 0.5%. This marks the highest annual inflation rate since January 2024. Economists suggest that the persistent price pressures, similar to those observed in Spain, could influence the ECB's cautious approach to interest rate adjustments. The inflation rate in Germany has now been above the ECB's target for four consecutive years. Experts believe that price pressures will remain elevated for the time being. In contrast, the average annual inflation rate for 2024 is projected to be 2.2%, indicating a decline compared to previous years.