German Inflation Remains Steady Ahead of Elections
As Germany prepares to head to the polls next month, the country’s inflation rate remains unchanged at 2.8% year-on-year, according to preliminary data from the statistics office Destatis. This reading aligns with economists’ forecasts and marks the fourth consecutive month above the European Central Bank’s 2% target.
A Steady Trend
On a monthly basis, the harmonized consumer price index fell by 0.2%. This steady trend mirrors the development of re-accelerating inflation in the wider euro area, where inflation came in at 2.4% in December. The European Central Bank has stated that disinflation in the bloc “is well on track” and has broadly developed in line with staff projections.
Economic Concerns Take Center Stage
The January inflation print is among the final key economic data released before Germany’s election on February 23. The country’s economy has been a major topic during campaigning, alongside immigration, as Germany grapples with lackluster economic growth and the renewed rise of inflation. The government has slashed gross domestic product expectations to 0.3% for full-year 2025, after annual GDP contracted in the last two years.
Sluggish Growth Persists
Quarterly growth has also been sluggish, although the economy has so far avoided a technical recession. Non-harmonized inflation is expected to average 2.2% this year, according to the government’s annual economic report. As the election approaches, these economic concerns will likely remain at the forefront of voters’ minds.
Stay Informed
This is a developing story, and we will continue to provide updates as more information becomes available. Stay ahead of the curve with the latest news and insights on global business and financial markets.
Leave a Reply