BERLIN, Jan. 6 (Xinhua) -- Germany's inflation rate climbed to 2.6 percent in December 2024, with official data released on Monday indicating an annual average of 2.2 percent for the year.
The figure for December marks the third consecutive monthly increase, following a low of 1.6 percent in September. The rebound was driven by a narrowing decline in energy prices, while service prices continued to rise sharply since early 2024. According to the Federal Statistical Office, service prices increased by 4.1 percent year-on-year in December.
"The difficult last mile is back," said Carsten Brzeski, global head of Marco division of ING Research, referring to Germany's prolonged efforts to lower inflation. He underscored a growing risk of stagflation, which indicates a combination of sluggish economic growth and rising prices.
The statistics authority estimated that the annual inflation rate for 2024 stood at 2.2 percent, marking a significant drop from 5.9 percent in 2023 and 6.9 percent in 2022. The steep increase of consumer price in previous years was largely driven by soaring energy costs following the Russia-Ukraine conflict.
Looking ahead, the German central bank forecasts that inflation rate in Europe's largest economy will see only a slight decline in 2025. Major contributing factors include the slow easing of persistently high service prices, the diminishing effect of lower energy prices, and the inflationary effects from substantial wage increases.
Brzeski anticipates inflation to fluctuate between 2 percent and 2.5 percent throughout 2025.
