Customers waiting at the checkout in a supermarket.
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German inflation was unchanged year-on-year at 2.8% in January, preliminary data from the country’s statistics office Destatis showed Friday in the last reading before Germans head to the polls next month.
The reading was also in line with a forecast from economists polled by Reuters. The print is harmonized across the euro area for comparability.
On a monthly basis, the harmonized consumer price index fell by 0.2%
Germany’s inflation rate has now stayed above the European Central Bank’s 2% target for the fourth month in a row, after falling below that threshold in September last year.
This roughly mirrors the development of re-accelerating inflation in the wider euro area. The European Central Bank on Thursday said that disinflation in the bloc “is well on track” and has broadly developed in line with staff projections.
Euro area inflation came in at 2.4% in December. The January figures are slated for release next week.
Friday’s data showed that German core inflation, which strips out food and energy prices, was at 2.9% in January, down markedly from the 3.3% print of December.
Services inflation also eased slightly, coming in at 4% in January compared to December’s 4.1%.
Germany’s weak economy appears to be having a disinflationary effect, Sebastian Becker, economist at Deutsche Bank Research, said in a note on Friday.
Preliminary data released Thursday showed that Germany’s economy contracted by 0.2% in the fourth quarter of last year, which was more than expected.
“This strengthens our view that the services rate and therefore also the core rate will continue to fall as the year continues,” he said, according to a CNBC translation. This suggests that the European Central Bank will likely stick to its monetary policy easing course, Becker added.
The January inflation print is among the final key economic data released before Germany’s election on Feb. 23, which is taking place earlier than originally scheduled after the collapse of the ruling coalition in November 2024.
Germany’s economy has been one of big topics during campaigning next to immigration, as the country has been grappling with lackluster economic growth and the renewed rise of inflation.
The government earlier this week slashed gross domestic product expectations to 0.3% for full-year 2025, after annual GDP contracted in the last two years. Quarterly growth has also been sluggish, even as the economy has so far avoided a technical recession characterized by two consecutive quarter of contraction.
Non-harmonized inflation is expected to average 2.2% this year, the government added in its annual economic report.