German inflation July 2025

Rhineland-Palatinat, Mainz: fruit is sold on the weekly market.

Andreas Arnold/dpa | Image Allianz | Getty pictures

German inflation fell more than expected in July. The data of the statistics authority of destatis showed on Thursday.

Economists surveyed had expected inflation to decrease to 1.9%. In the July reading, the 2% presence in June, which corresponded to the German inflation rate in accordance with the aim of the European Central Bank.

The numbers are harmonized across the euro zone to ensure comparability. The inflation data of the euro zone are due later this week, whereby the reading forecast is 1.9%.

The so-called core inflation, which extends food and energy costs, was 2.7%in July, as the data unchanged compared to the previous month. In the meantime, the inflation pressure of the closely observed services in June continued to detach from 3.3% to 3.1% in June.

Carsten Brzeski, Global Head of Macro at ING, said on Thursday in a note that the latest data pointed out that Germany was “currently experiencing a process of disinflation”. The heading inflation will now remain below, but close to the 2% brand, he added.

Inflation numbers are closely observed by economists and analysts if they evaluate the effects of US President Donald Trump's tariff policy. In the past few months, several sectoral tariffs and temporarily the mutual tasks have been reduced in recent months.

Last week, the European Union and the United States were an agreement that was made with 15% tariffs of EU goods. While the taxes are generally expected to influence prices in the United States, it is less clear whether and how inflation can be influenced elsewhere.

“It remains to be seen how European and US companies will react to US tariffs. While in a scenario the prices in the euro zone due to overcapacities and weaker sales in the USA could decrease in the eurozone, operational companies worldwide could actually try to increase prices in Europe in order to rule out profit in the USA,” said Brzeski.

The number of inflation on Thursday comes shortly after Destatis published a preliminary reading of the gross domestic product in Germany in the second quarter on Wednesday. The economy shrank slightly by 0.1% in the period and marked a decline compared to the growth of 0.3% in the first quarter.