BERLIN, Jan. 31 (Xinhua) -- Inflation in Germany eased to 2.3 percent in January, down from 2.6 percent in the previous month, according to preliminary data released by the country's statistics office on Friday.
Food prices saw a modest year-on-year increase of 0.8 percent in January, a notable slowdown from the nearly 2 percent growth recorded in the previous months.
Core inflation, which excludes volatile food and energy prices, fell to 2.9 percent, marking a decline after remaining above 3 percent for much of 2024. This easing may help alleviate concerns over a resurgence of overall inflationary pressures in Europe's largest economy.
German inflation has steadily declined over the past year, largely due to falling energy prices, which contributed to an annual average inflation rate of 2.2 percent in 2024. However, the pace of disinflation is expected to slow as the favorable energy base effect weakens, while rising service prices continue to exert upward pressure. The year-on-year increase in service prices was 4 percent in January.
Carsten Brzeski, the global head of macro at ING Research, suggested that inflation in Germany may remain "slightly too high," expecting a range of 2 to 2.5 percent throughout 2025.
A survey released by the ifo Institute on Friday echoed this outlook. While fewer German companies in the manufacturing sector are planning price hikes, businesses in consumer-related services such as hotels, travel agencies and entertainment are increasingly looking to raise prices, the Munich-based think tank reports.
"The inflation rate is expected to hover around 2.5 percent in the coming months, and thus above the European Central Bank's target," ifo's Head of Forecasts Timo Wollmershaeuser said. The central bank defines price stability in the eurozone as an inflation rate of 2 percent. ■