It is the lowest rate since June 2021, Destatis said. Fueled by soaring energy prices, inflation in Europe's largest economy peaked at 10.4 percent in October 2022.
Despite the discontinuation of a government-financed price cap on energy, as well as an increase in the CO2 tax, energy prices in January fell by 2.8 percent year-on-year. Food remained the main driver of inflation, with an increase of 3.8 percent.
Since the beginning of the year, meals sold in restaurants in Germany have been charged at the regular value-added tax rate of 19 percent, instead of the reduced rate of 7 percent that applied during the COVID-19 pandemic and the energy crisis.
According to a survey by the German Hotel and Restaurant Association, three out of four restaurants already raised their prices at the turn of the year as a direct consequence of the higher tax.
After an annual inflation of 5.9 percent in 2023, the German government expects consumer prices to rise by 2.6 percent in 2024, according to the latest economic outlook published in October.
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