The inflation rate in Germany is currently at 2.1%, which is just above the European Central Bank’s (ECB) target of 2%. Compared to other major euro countries such as France, Italy, and Spain, which have even lower inflation rates, this could influence the ECB’s decision on monetary policy.
Inflation Development in Germany and the Eurozone
Germany: The inflation rate in Germany stabilized at 2.1% in May 2025, after also being at 2.1% in April. In the autumn of 2024, the inflation rate temporarily fell below the ECB target, but has since increased again. Core inflation, which excludes energy and food prices, is at 2.8%.
Eurozone: Inflation in the Eurozone is also approaching the ECB target. It is expected that the inflation target of 2% will be sustainably achieved in 2025.
Comparison with Other Euro Countries
- France: The inflation rate in France is particularly low at 0.7%.
- Italy: Italy is experiencing an inflation rate of 1.7%.
- Spain: In Spain, the inflation rate is at 1.9%.
Impacts on the ECB’s Monetary Policy
The ECB has lowered interest rates several times in recent months to strengthen the economy and stabilize inflation. Given the low inflation rates in many Eurozone countries, it is expected that the ECB may continue to lower its rates. Another rate cut could occur on June 5, with the deposit rate potentially being reduced from 2.25% to 2.0%.
Risks and Uncertainties
Despite the positive developments, significant risks remain for inflation, particularly due to geopolitical tensions and conflicts in Europe and the Middle East. These factors could influence inflation and threaten economic stability.