Germany: Inflation drops in October from the prior month
Latest reading: Harmonized consumer prices rose 2.3% on a year-on-year basis in October, following a 2.4% increase in the previous month.
Relative to the previous month’s data, there were softer price pressures for food and non-alcoholic beverages (+2.1% on a year-on-year basis vs +2.8% in September) and restaurants and hotels (+3.5% vs +3.7% in September). In contrast, there were higher price pressures for transportation (+2.7% vs +2.5% in September) and recreation (+1.4% vs 0.6% in September). Finally, the change in housing and utilities prices was the same as in the prior month (+1.4% in October and September).
Meanwhile, consumer prices were stable at September’s 2.4% in October.
Lastly, harmonized consumer prices fell -0.5% in October in month-on-month terms, following a 0.3% rise in the previous month.
Panelist insight: Commenting on the outlook, EIU analysts stated:
“Lacklustre German growth is constraining overall demand-pull inflation, new US tariffs are having a disinflationary impact outside of the US owing to the redirection of exported goods, and the stronger euro is reducing imported inflation. We expect these pressures to push inflation down to about 1.7% by end-2025, with the headline rate remaining moderate in early 2026 in the context of new measures to control industrial energy prices, including a cap on electricity prices for the most energy-intensive firms.”