Inflation falls to 2.0 percent: consumers breathe!

Inflation falls to 2.0 percent: consumers breathe!

The news about the inflation rate in Germany brings a breath of fresh air to economic discussions: in June 2025 it dropped to 2.0 percent, and that has been the lowest level in over half a year. So the Ludwigsburger Kreiszeitung . Particular attention is paid to the falling energy prices, which have fallen by 3.5 percent, and the stable food prices, which increased only by 2.0 percent in June, after an increase of 2.8 percent in May.

The consumers still feel the weight of high prices, especially for butter, chocolate, fruit and vegetables. But the decline in the inflation rate could ensure a touch of relief. Wages that have increased by 3.3 percent in services also play a role in this complex structure of pricing.

background and effects

The way to this noticeable reduction was bumpy. Inflation had risen sharply after the Russian attack on Ukraine in 2022. From an average of 6.9 percent in 2022, the rate fell to 5.9 percent the following year. The crisis situation had significantly increased the price pressure to many goods and restricted the purchasing power of consumers. More than just a small part of this dynamic can also be attributed to the dependence on the dependence on energy imports from Russia, such as the Tagesschau

Although international market prices for natural gas have recently decreased, these price reductions often do not reach end consumers. A combination of western sanctions and the stop of natural gas deliveries has mixed up the price landscape. The trade between the EU and Russia has also noticed noticeably, which is an additional obstacle to economic recovery.

look ahead

The Bundesbank is optimistic and expects that the inflation rate will fluctuate around the two percent mark in the coming months. Economists even expect a year of around two percent by 2025. It remains to be seen whether the planned investments in defense and infrastructure will influence these forecasts, since there are also possible uncertainties in the US customs policy.

At a time when many people pay attention to prices while shopping and companies are unsettled, it remains to be seen how the economy will develop as a whole. But the data show that movement actually gets into the matter. The question is whether this positive development can stop or whether we are imminent up and down.