Germany's inflation rate rose to 2.8% in July 2026, up from 2.3% in June, primarily propelled by a significant increase in energy prices. This surge was attributed to the ongoing Iran war impacting crude oil prices and the discontinuation of the government fuel discount on June 30. Energy products collectively saw an 8.3% year-on-year increase, with motor fuel prices jumping 23.0% and heating oil up 34.7%.
Despite the overall inflation rise, core inflation, which excludes volatile food and energy prices, stood at 2.4% in July, a slight decrease from 2.5% in June. This indicates that while energy costs are a major factor, their impact has not yet broadly spread across other sectors of the economy. Prices for goods increased by 2.5%, with non-durable consumer goods up 3.7% due to energy, and durable consumer goods up 0.3%.
Month-on-month, consumer prices rose by 0.8% in July. The end of the fuel discount led to an 11.2% increase in motor fuel prices. Additionally, package international holidays surged by 12.6% and international flight tickets by 7.1%. In contrast, food prices remained largely stable with a 0.1% increase, and some items like fresh fruit, butter, and coffee saw price declines. Electricity and natural gas prices also fell year-on-year by 5.3% and 2.9% respectively, partly due to government measures.
