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Germany’s annual inflation rate held at 2% in July 2025, unchanged from June, matching preliminary estimates and remaining at its lowest level in eight months. Falling energy costs continued to weigh on overall inflation, with prices down 3.4% (vs -3.5% in June). The decline was led by motor fuels (-4.5%) and household energy (-2.6%), including sharp drops in firewood, wood pellets, and other solid fuels (-5.3%), heating oil (-5.0%), and electricity (-2%). Services inflation also eased to 3.1% from 3.3%, despite sharp increases in combined passenger transport services (+11.3%), parcel services (+9%), and social facilities (+8.2%). Meanwhile, food inflation rose to 2.2% (vs 2%), driven by fruit (+7.6%), sugar and confectionery (+5.6%), and dairy products (+4.1%). Core inflation, excluding food and energy, remained steady at 2.7%. Monthly, the CPI 0.3% after stalling in June, mainly due to higher travel costs, including international flights (+12.7%) and package holidays (+10.7%).