FX.co ★ Germany Inflation Slows to 2% in June, Matching ECB Target

Germany's annual consumer price inflation eased to 2.0% in June 2025, a slight decrease from 2.1% in May and falling short of market projections of 2.2%, based on preliminary estimates. This represents the lowest inflation rate since October 2024, aligning once again with the European Central Bank's target for the first time since then. There was a slight reduction in service inflation, which decreased to 3.3% from 3.4% the previous month, while goods inflation decreased to 0.8% from 0.9%. The primary contributors to this decline were a deceleration in food inflation, which fell to 2.0% from 2.8%, and a reduction in energy prices, which dropped by 3.5% compared to a previous decline of 4.6%. Additionally, core inflation, which excludes food and energy prices, reached a three-month low of 2.7%. On a monthly basis, consumer prices remained unchanged in June, after experiencing a slight increase of 0.1% in May.