BERLIN, Jan. 6 (Xinhua) -- The price growth in Germany slowed more than expected to 1.8 percent in December 2025, preliminary data showed on Tuesday, putting annual inflation at 2.2 percent for 2025.
According to the Federal Statistical Office (Destatis), the December reading eased from 2.3 percent in October and November, driven primarily by a steeper decline in energy prices. Food inflation slowed to 0.8 percent after having outpaced the headline rate for much of 2025.
By contrast, services inflation remained elevated at 3.5 percent in December, underscoring persistent price pressures in labor-intensive sectors in Europe's largest economy.
While Berlin introduced a tax relief package on Jan. 1, 2026, including a cut in value-added tax on restaurant meals to 7 percent from 19 percent, analysts argue the measure is more likely to support margins in the hospitality sector than to drive a meaningful disinflationary impact.
"German inflation should basically fluctuate around 2 percent throughout 2026," said Carsten Brzeski, global head of macro at ING. He noted that a stronger euro and favorable energy base effects could ease price pressures in the coming months, before inflation picks up modestly later in the year as fiscal stimulus adds upward pressure.
