German inflation confirmed at 15-month low as energy prices slide

(Sharecast News) - German inflation slowed significantly in December to a 15-month low, final Federal Statistical Office estimates confirmed on Friday, as price pressures on food goods eased and energy prices dropped. The annual increase in the consumer price index fell to 1.8% last month, down 0.5 percentage points from 2.3% in November, Destatis reported.

The figure, which was in line with the flash estimate released two weeks ago, was the lowest rate of annual inflation since September 2024, and the second-lowest since the end of 2020.

It was also well below the 2.2% annual average rate seen across 2025, in line with 2024, Destatis said, and the first reading below the European Central Bank's 2% target level all year.

"The rise in prices therefore slowed towards the end of the year. In particular, the decline in energy prices intensified further in December 2025, contributing more to the reduction of inflation," Destatis said.

Energy prices dropped by 1.3% in December, when compared with the year before, following a 0.1% decline in November, while food inflation slowed to just 0.8% from 1.2%.

Core inflation, which excludes the more volatile food and energy items, came in a 2.4%, down from 2.7% in November and the lowest since June 2021.