German inflation rate climbs to 2.6% in December

The German inflation rate climbed to 2.6% in December compared to the same month of the previous year, official figures showed on Monday, with consumer prices rising by an average of 2.2% over the whole of 2024.

The data from the Federal Statistical Office suggests further challenges for the ailing German economy, which has struggled to recover from years of high price rises following the coronavirus pandemic and the Russian invasion of Ukraine in February 2022.

With the cost of energy soaring, Germany saw inflation reach 6.9% in 2022 and remain at 5.9% in 2023, the highest rates since reunification in 1990.

While the yearly figure for 2024 has stabilized at 2.2%, the December estimate follows warning signs earlier in the autumn, with consumer prices rebounding from a low of 1.6% in September, reported dpa.

Services such as restaurant meals, aeroplane tickets and insurance were once again among the drivers of inflation in December, rising by 4.1% compared to the previous year.

Food cost 2% more than in December 2023, while the price of energy fell by 1.7%.

The dampening effect from lower energy prices fell in comparison to November, however, when the figure was 3.7% lower than in 2023.

The core inflation rate - excluding volatile food and energy prices - was calculated at 3.1% in December. The statistic is considered by many economists to be more representative of real inflation.

The European Central Bank's target for inflation in the eurozone is 2%.