Germany's Inflation Rate Rises

In a recent report, Germany's Federal Statistical Office (Destatis) confirmed that the annual inflation rate in December increased to 2.6%, up from 2.2% in November. This marks a notable rise in the cost of living for Germans as the year came to a close.

Monthly CPI and Annual Trends

On a monthly basis, the Consumer Price Index (CPI) saw a 0.5% increase in December, slightly above the 0.4% forecast. Looking back at the year 2024, the inflation rate averaged at 2.2%, significantly lower than the previous three years. Destatis highlighted that the inflation rates were 5.9% in 2023, 6.9% in 2022, and 3.1% in 2021, indicating a trend of decreasing inflation rates before the recent uptick.

Harmonized Index and Core Inflation

Furthermore, the harmonized index of consumer prices experienced a 2.8% year-over-year increase in December, with a 0.7% rise compared to November. The core annual inflation rate for 2024, excluding volatile items such as energy and food, stood at 3%, underscoring the underlying inflationary pressures in the German economy.