Prices for goods and services increased by 2.0% in July for consumers - Prices for consumer goods increased by 2% in July's statistics
In July 2025, Germany's Consumer Price Index (CPI) rose by 0.3%, with an annual increase of 2.0%. This rate marked a significant decrease from the peak of 2.6% seen in December 2024, indicating a cooling trend over the recent months [1][4][5].
The 2.0% increase was primarily driven by above-average rises in services and food prices. Services prices increased by 3.1% year-on-year, while food prices rose by 2.2%. In contrast, energy prices declined by 3.4% [1][4].
The monthly CPI increase was mainly influenced by higher travel costs such as international flights and package holidays. However, it's worth noting that vegetables were 3.2% cheaper, and potato prices were 16.1% lower than in July 2024 [1].
Core inflation, which excludes food and energy, remained steady at 2.7%. This suggests that the inflationary pressure from services and food costs was partially offset by the decline in energy prices [1].
The price increase in services, which was 4.0% at the beginning of the year, is easing. For instance, chocolate became 18.6% more expensive year-on-year, but heating oil, electricity, and wood pellets were 5.0%, 2.0%, and 5.3% cheaper, respectively [1].
Ruth Brand, President of the Federal Statistical Office, confirmed the preliminary calculations of this increase. She stated that the inflation rate has remained unchanged for the second consecutive month [4].
Economists estimate that the inflation wave of recent years, during which the inflation rate peaked at almost nine percent, has ended. In 2022, inflation in Germany soared to 6.9%. However, they expect an average inflation rate of around 2.0% for the whole year [4].
| Factor | Effect on CPI July 2025 | |------------------------------|------------------------------------------| | Services prices | +3.1% (yearly increase, upward pressure) | | Food prices | +2.2% (yearly increase, upward pressure) | | Energy prices | -3.4% (yearly decrease, downward pressure) | | Core inflation (excl. food & energy) | 2.7% (steady) | | Monthly CPI change | +0.3% (due to travel costs rise) |
This nuanced composition shows inflation driven by services and food cost increases, offset partially by declining energy costs, resulting in stable 2.0% annual inflation in July 2025 [1][4][5].
[1] Statistisches Bundesamt (2025). Preliminary Results of the CPI for July 2025. [4] The Guardian (2025). Germany's Inflation Rate Remains Unchanged for Second Consecutive Month. [5] Reuters (2025). Germany's Consumer Prices Rise 0.3% in July, Inflation at 2.0%.
The community could consider implementing a policy focusing on vocational training to mitigate the impact of inflation on businesses, particularly in the service sector, given the 3.1% year-on-year increase in service prices and the easing but still high price increase in services, which was 4.0% at the beginning of the year. Implementing such a policy could help to manage costs associated with business operations and potentially reduce the need for increased financing.
