Inflation in Germany weakened further in February, with the consumer price index (CPI) up an annual 2.5% this month compared to a 2.9% annual rise in January, according to preliminary data released by the Federal Statistical Office on Thursday.

Economists expect inflation to fall further over the course of the year. However, the decline could lose pace due to an increase in the price of carbon dioxide, a key industrial ingredient, to €45 per ton from €30 ($33) per ton and a return of the regular value added tax rate on food in restaurants.

Higher inflation rates reduce the purchasing power of consumers, resulting in many cutting back on expenditures.

According to preliminary figures, household energy and fuel became 2.4% cheaper in February compared to the same month last year. Food cost 0.9% more than in February 2023, meaning that the increase slowed. An increase of 3.8% was recorded in January.

Compared to the previous month of January, the CPI rose by 0.4%, the preliminary data showed.