In June 2025, Germany's annual inflation rate dropped to 2%, marking the lowest level in eight months. This was a slight decline from the consistent rate of 2.1% seen in both April and May, aligning with preliminary expectations. According to the President of the Federal Statistical Office, the decrease was largely attributed to a continued reduction in energy prices, alongside a notable slowdown in food price inflation. However, inflationary pressures from an above-average rise in service prices persisted.
Energy prices experienced a 3.5% decrease, moderating from a 4.6% drop in May, primarily driven by a 4.6% reduction in motor fuel costs. Household energy expenses also fell by 2.8%, offering relief to consumers through reduced prices for firewood, wood pellets, and other solid fuels, each seeing a 5.6% decrease, as well as lower costs for heating oil (down 5.6%) and electricity (down 2.4%).
Food inflation decelerated to 2% from 2.8%, while service prices saw a slight increase of 3.3% compared to 3.4% previously. Noteworthy price hikes were observed in several sectors, with combined passenger transport services rising by 11.4%, services of social facilities up by 8.5%, insurance services increasing by 8.1%, in-patient health services up by 6.5%, and vehicle maintenance and repair costs climbing by 5.6%.
