Price dynamics in Germany unexpectedly slowed in February 2026 to a level of 1.9%, falling below the strategic target of the European Central Bank. Simultaneously, the latest data from the Federal Statistical Office confirms the trend of rising real wages, translating into a real increase in consumers' purchasing power. The drop in energy prices more than compensated for the persistent price pressure in the food sector, stabilizing the economic situation in key federal states.

Inflation Below Target

The price growth rate fell to 1.9%, which is a level lower than the inflation target set by the ECB.

Increase in Purchasing Power

Wages in federal states such as Bavaria and Lower Saxony are growing faster than prices, increasing real incomes.

Cheaper Energy

The main driver of the decline in the overall inflation rate was lower prices for energy carriers on the German market.

Tourism Stability

The tourism industry in Brandenburg and North Rhine-Westphalia remains stable, recording increases in the number of overnight stays.

The German economy is sending optimistic signals, combining an effective fight against high prices with an improvement in household finances. According to preliminary estimates from the Federal Statistical Office, the annual inflation rate in February stood at 1.9%, representing a decrease compared to the previous month. This result is better than market expectations, which had assumed stabilization around 2%. The main factor curbing price growth was cheaper fuel and energy, although consumers still feel relatively high food prices. The situation varies by region – for example, in Saxony, inflation remained unchanged, while other federal states recorded clear declines. The European Central Bank has for years aimed to maintain medium-term inflation in the eurozone at 2%, considering this the optimal level for price stability and economic growth.A significant element in easing budgetary pressure for citizens is the rise in real wages. Data from individual federal states, such as Bavaria, Lower Saxony, and Thuringia, indicate that nominal wages grew faster than the prices of goods and services. This phenomenon, defined as an increase in purchasing power, means that workers can actually afford more despite months of ongoing market uncertainty. This trend persisted throughout 2025 and, as the latest readings indicate, is continuing at the beginning of the current year. The increase in disposable income is crucial for reviving private consumption, which forms the foundation of German GDP. Simultaneously with the inflation and wage data, positive reports are coming from the tourism sector. The industry in Brandenburg and North Rhine-Westphalia shows great stability, with the number of overnight stays in some regions increasing by nearly 50,000 year-on-year. This suggests that increased purchasing power is beginning to translate into recreational spending, even though the economy as a whole is still grappling with slow growth. Analysts note that controlled inflation alongside wage growth could prompt the European Central Bank to consider interest rate cuts, which would further stimulate investments and ease credit costs for businesses. „Vorläufige Daten zeigen, dass das Niveau der Verbraucherpreise in Deutschland im Februar 2026 im Vergleich zum Vorjahresmonat um 1,9 Prozent gestiegen ist.” (Preliminary data show that the level of consumer prices in Germany in February 2026 increased by 1.9 percent compared to the same month last year.) — Destatis