FX.co ★ Germany Inflation Rate Confirmed Steady at 2%

In July 2025, Germany's annual inflation rate remained steady at 2%, consistent with June's figure and preliminary projections, marking the lowest level in eight months. The continuous decline in energy prices played a significant role in sustaining this rate of inflation. Specifically, energy costs decreased by 3.4%, following a 3.5% drop in June, largely due to reductions in motor fuel prices (-4.5%) and household energy expenses (-2.6%). Notably, there were significant drops in the cost of firewood, wood pellets, and other solid fuel types (-5.3%), heating oil (-5.0%), and electricity (-2.0%). Services inflation saw a slight reduction, easing to 3.1% from 3.3%, although notable increases were observed in sectors such as combined passenger transport services (+11.3%), parcel services (+9.0%), and social facilities (+8.2%). Meanwhile, food inflation experienced a rise to 2.2%, up from 2%, driven by significant price hikes in fruit (+7.6%), sugar and confectionery (+5.6%), and dairy products (+4.1%). Core inflation, which excludes both food and energy, held steady at 2.7%. On a monthly basis, the Consumer Price Index (CPI) increased by 0.3%, after showing no change in June, primarily due to elevated travel expenses, including international flights (+12.7%) and package holidays (+10.7%).