Shoppers stroll through a shopping district during the Christmas season, taking advantage of stores’ after-Christmas sales on December 28, 2024 in Munich, Upper Bavaria, Germany.
Michael Nguyen | Null Photo | Getty Images
Germany’s inflation rate rose more than expected to 2.8% in December, Germany’s statistics agency Destatis said in its first figures since the country’s government was dissolved late last month.
Preliminary national consumer price indexes are harmonized across the euro area for ease of comparison. This compares with analysts’ expectations of 2.6% compiled by Reuters.
The harmonized consumer price index rose 0.7% month-on-month, Destatis said.
In December, Germany’s inflation rate exceeded the European Central Bank’s target of 2% for the third consecutive month. This indicator fell to 1.8% in September, but returned to 2.4% in October and remained unchanged at that level in November.
So-called core inflation, which subtracts the cost of food and energy, edged up to 3.1% in December from 3% the previous month. Services inflation also rose slightly, to 4.1% compared to 4% in November, the statistics agency said.
Carsten Brzeski, global head of macro at ING, said on Monday that the data showed that “summer celebrations of successfully conquering the inflation monster were premature.”
He noted that less favorable energy-based effects are likely to be the main driver of Germany’s reacceleration of inflation.
“We expect inflation to remain persistent at slightly too high levels, as favorable energy-based effects continue to decline while wages rise,” Brzeski said.
The latest figures come at a time of political uncertainty in Germany and are one of the last major economic indicators before federal elections are held earlier than originally scheduled on February 23.
Germany’s former ruling coalition split in November, with Chancellor Olaf Scholz sacking former finance minister Christian Lindner and announcing he would call early elections.
Since then, the country has taken a series of constitutional measures to pave the way for the polls, including a vote expressing no confidence in Scholz and the formal dissolution of Germany’s lower house of parliament by President Frank-Walter Steinmeier. I am teaching.
Correction: This article has been updated to reflect that Germany’s statistics agency Destatis revised the year-on-year adjusted inflation rate to 2.8% in December.
