Bavaria Inflation Eases to 2.8% in October as Price Pressures Recede Across German States
Key Facts
Annual inflation in Bavaria eased to 2.8% in October from 3.2% in September, and fell in North Rhine-Westphalia to 2.7% from 3.3%, according to data reported by Reuters on October 30. Declines were also recorded in other major German states, offering signals ahead of the national reading. Economists polled by Reuters forecast German harmonised inflation at 3.1% in October, compared with 3.3% in the previous month. The agency said the national figures would be released later on Friday. The state-level declines point to easing pressures after inflation accelerated in September, but do not by themselves establish the national index outcome.
In other states, annual inflation in Lower Saxony fell to 2.9% from 3.3%, while in Baden-Württemberg it declined by 0.3 percentage points to 2.6%. Saxony recorded 2.8%, unchanged from the previous level cited in the Reuters report. These readings followed an increase in national inflation to 3.3% in September, from 2.9% in August and 2.8% in July, according to Germany’s Federal Statistical Office. The office described September’s reading as the highest since December 2023. Harmonised inflation, used to compare euro-area countries, differs from the national consumer price index in its coverage, methodology and weights.
Energy was the main driver of the increase in inflation in September, with energy product prices rising 14.9% year on year, after increases of 10.5% in August and 8.3% in July. Ruth Brand, president of the Federal Statistical Office, attributed the rise in inflation to energy prices, particularly fuel and heating oil. Month on month, the consumer price index rose 0.6% in September, while energy prices increased 3.8%. Heating oil jumped 18.5% during the month, and motor fuel prices rose 6.9%. Reuters said the war in Iran had pushed up energy prices in recent months.
By contrast, food prices rose just 0.4% year on year in September, with larger increases for some goods: egg prices climbed 15.2% and fresh vegetable prices rose 12.0%. The German government forecast inflation of 2.7% in 2026 and 3.0% in 2027, according to Reuters. In separate data, gross domestic product grew 0.2% quarter on quarter in the third quarter, according to the Federal Statistical Office. Annual growth was 1.3% after price adjustment, or 1.2% after adjustment for prices and calendar effects. The office said final consumer spending rose slightly from the previous quarter, while gross capital formation initially declined and export growth slowed markedly.
Germany’s inflation figures are being watched as the European Central Bank keeps interest rates unchanged, while euro-area inflation remained at 3.8%, above the bank’s 2% target, according to the Associated Press. The euro-area harmonised index of consumer prices flash estimate for October is scheduled for publication on November 4, 2026, at 15:00, according to the European Central Bank calendar. For German data, the Federal Statistical Office has set November 25, 2026, as the date for publishing detailed third-quarter GDP results. The energy tax cut, which applies in particular to motor fuel, also took effect on October 1 and was not included in September’s inflation data.