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Germany Inflation Ticks Up to 2.1% in January as Food, Services Rise

Core inflation of 2.5% signals persistent pressure from services, with food a key driver despite cheaper household energy.

Overview

  • Destatis confirmed consumer prices rose 2.1% year on year in January and 0.1% from December, with the harmonised index also up 2.1% annually.
  • Food prices increased 2.1% from a year earlier, led by chocolate up 21%, fruit up 6.1% and meat up 4.9%, while butter fell 33% and olive oil 13.5%.
  • Services rose 3.2% year on year, including higher public-transport costs reflecting the Deutschlandticket move to €63 from €58.
  • Energy prices were 1.7% lower than a year earlier, with electricity down 3.2% and gas down 2.5%, while motor fuels rose 0.5% year on year and 5.6% month on month, which analysts tie to pricier oil and a higher CO2 charge.
  • Economists expect inflation in 2026 to run slightly above 2%, and an Ifo Dresden study shows 2020–2025 inflation exceeded the national average in several eastern states and Bremen, led by Brandenburg.