28.05.2025

Inflation in Germany: April 2025 Update

Current Inflation Development in Germany

The current inflation figures for Germany show a further weakening of inflation. In April 2025, the inflation rate, measured by the Consumer Price Index (CPI) compared to the same month last year, was +2.1%. This is a slight decrease compared to March 2025 at +2.2% as well as to January and February, both at +2.3%.

Details on Price Development in April 2025

  • Consumer prices rose by 0.4% compared to the previous month of March.
  • Energy prices had a dampening effect on inflation.
  • Rising prices for food and services, on the other hand, drove inflation up.
  • The harmonized Consumer Price Index (HCPI), used for European comparison, stood at +2.2% in April compared to the same month last year.

Impacts on Monetary Policy and Markets

The inflation rate of just above two percent is close to the target value of the European Central Bank (ECB). Experts see this as a “comfort zone” in which price pressure is considered not problematic. This could increase the scope for possible interest rate cuts by the ECB or at least make further restrictive measures unlikely. The Institute for Macroeconomic and Business Cycle Research also predicts a further normalization of the inflation rate in the course of 2025 to around two percent. For eight out of nine household types, the inflation rate is already below or exactly at the ECB target of two percent, which could suggest a potential easing of monetary policy.

Summary

  • Inflation rate Germany April 2025: approx. +2.1%
  • Slight decline since the beginning of the year
  • Energy prices lower inflation; food & services drive it up
  • Proximity to the ECB target of 2% creates room for monetary policy decisions
  • Forecast: stabilization around the target level with possible monetary easing

This data is crucial for investors and market participants, as it may provide hints for future interest rate decisions and thus could have significant impacts on financial markets.