Consumer price inflation climbs to 2.1% in the month of May.
Germany's Consumer Price Inflation Remains at 2.1% in May 2025
The Federal Statistical Office (Destatis) in Wiesbaden announced on Friday that Germany's consumer price inflation remained steady at 2.1% in May, slightly below analysts' expectations of 2.2%. The monthly increase in consumer prices was a moderate 0.1%, marking a significant slowdown from April's 0.4% rise.
The core inflation, excluding food and energy, rose by approximately 2.8% year-on-year, indicating robust underlying inflationary pressures.
According to preliminary data from Destatis, Germany's inflation rate might increase to around 2.2% by the end of the second quarter of 2025, as projected by analysts. On a longer-term basis, econometric models anticipate a trend around 2.1% for 2026, with a decrease to 1.9% in 2027.
The eurozone is currently witnessing a broader disinflation trend, with inflation easing in countries like Spain and Italy, parallel to Germany. This trend correlates with the European Commission's Spring 2025 Economic Forecast, predicting inflation in the euro area to meet the ECB target by mid-2025, averaging 1.7% in 2026.
Several factors contribute to the inflation trends. External factors, such as trade tensions and uncertainty stemming from changes in US trade policies, impact economic growth projections. Domestic factors, notably a moderation in consumer prices in categories like leisure and cultural services, contribute to the disinflationary trend observed in neighboring countries.
The Spring 2025 Economic Forecast projects real GDP growth in the EU at 1.1% and in the euro area at 0.9% for 2025. The GDP growth is expected to rebound in 2026, bolstered by consumption and investment.
Germany's inflation rate, predicted to increase to around 2.2% by the end of the second quarter of 2025, is a critical aspect in the nation's finance sector and broader business environment. The Federal Statistical Office's projection aligns with analysts' expectations, suggesting a stable economic climate in the German business landscape.
