Germany’s producer prices rose by 0.5% year-on-year in January 2025, marking the third consecutive month of producer inflation, according to the Federal Statistical Office (Destatis). However, the figure fell short of analysts’ expectations of 1.3% and was lower than December’s 0.8% increase—the highest in a year and a half.

The uptick was mainly driven by higher costs for non-durable consumer goods, which rose 3% compared to January 2024. Prices of durable consumer goods increased 1.1%, while capital goods saw a 1.9% rise, fueled by higher machinery, trailers, motor vehicles, and semi-trailer costs.

In contrast, energy prices dropped by 1% annually due to falling costs of natural gas, electricity, and district heating, although mineral oil products became more expensive. Excluding electricity, producer prices rose by 1.2% year-on-year. On a monthly basis, prices fell 0.1% in January, the same decline as in December, but below market forecasts of 0.6%.

Ongoing Economic Challenges

Germany’s economy continues to face challenges, contracting by 0.2% in 2024—its second consecutive year of negative growth. The downturn has been attributed to high energy costs, weak export demand, increased global competition, and geopolitical uncertainties.

Political instability has further compounded the situation. The coalition government collapsed in late 2024 after Chancellor Olaf Scholz dismissed Finance Minister Christian Lindner, leading to a confidence vote that Scholz lost.

Additionally, concerns over potential US tariffs under President Donald Trump’s administration have heightened worries about the economic outlook for both Germany and the European Union. In 2023, Germany’s top exports to the US included cars, vaccines, and medicaments, while key imports from the US were cars, crude petroleum, and gas turbines, according to the Observatory of Economic Complexity.

Economic Outlook: Growth Expected to Return

Despite the recent challenges, Germany’s economy is projected to recover gradually. Gross domestic product (GDP) is expected to grow by 0.7% in 2025 and 1.3% in 2026, while inflation is forecast to average 2.1% this year before easing to 1.9% in 2026.

In its latest economic forecast, the European Commission expressed optimism about Germany’s recovery. “Construction is set to resume growth in early 2025, driven by recovering demand for housing and infrastructure,” the Commission stated. It also noted that recent tax incentives for investment, introduced in July 2024, are expected to boost equipment investment.

“Domestic demand is forecast to become the main driver of economic growth in 2025 and 2026,” the Commission added. However, it warned that elevated energy costs will continue to impact the competitiveness of energy-intensive industries. Meanwhile, the contribution of net exports is expected to be slightly negative in 2025 and neutral in 2026, despite an anticipated increase in demand from Germany’s main trading partners.

A cross-party group of MPs has warned that negative stereotypes of older people as wealthy “boomers” hoarding wealth are fueling ageist attitudes in society. A new report from the Commons’ Women and Equalities Committee criticizes such portrayals, calling for regulators to crack down on misleading and divisive narratives.

The committee highlights concerns that baby boomers—those born between 1946 and 1964—are often depicted as either frail or living lavish lifestyles at the expense of younger generations, normalizing a perception that MPs argue is both unfair and harmful. The report also criticizes the government’s failure to address digital exclusion, leaving many older people struggling to access essential services as they move online.

Stereotypes Fueling Generational Divide

The committee’s findings point to widespread portrayals of older people as “wealth-hoarding boomers” in UK media, particularly in discussions about intergenerational fairness. MPs warn that this framing pits younger and older generations against each other, reinforcing the belief that older people are living comfortably while young people struggle with low incomes, unaffordable housing, and rising rents.

Citing a 2020 report from the Centre for Ageing Better, the committee notes that older people are often misrepresented in television, magazines, and advertising, with little nuance in how their experiences are portrayed. Witnesses to the inquiry also highlighted inequalities within older generations, arguing that not all baby boomers are financially secure.

Despite statistics from the Office for National Statistics (ONS) showing that individual wealth tends to peak between ages 60 and 64, MPs stress that this does not reflect the full picture. Many older people, particularly those without private pensions or significant savings, struggle financially, while a significant proportion remain at risk of digital exclusion.

Digital Exclusion: A Growing Concern

MPs have also raised concerns that the shift towards online banking, healthcare, and public services has left many older people unable to access essential resources. Despite the government launching a digital inclusion strategy a decade ago, nearly one in three people over 75 (29%) lack internet access at home, compared to just 6% of the overall adult population, according to Ofcom.

Committee chair Sarah Owen, Labour MP for Luton North, described this as a “considerable failure of government”, urging immediate action.

“The digital inclusion strategy has not been updated or tracked for a decade. Older people are being left behind in access to healthcare, banking, and local services. More must be done to tackle ageist attitudes and discrimination across society.”

Calls for Stronger Protections and a Commissioner for Older People

The committee has called for tougher enforcement of existing anti-age discrimination laws, arguing that current measures fail to protect older people. The report suggests that regulators such as the Advertising Standards Authority and Ofcom should take stronger action against ageist narratives in media and advertising.

MPs have also urged the government to follow Wales’ example by appointing a Commissioner for Older People, alongside community champions to drive a national strategy on age inclusion.

Government Defends Record

A government spokesperson defended existing protections under the Equality Act, stating that it includes “strong protections for older people in work and public services”. The spokesperson also pointed to financial support for pensioners, emphasizing the government’s commitment to the triple lock, which is set to increase the state pension by up to £1,900 this Parliament.

While the government maintains that it recognizes the importance and challenges faced by older people, MPs insist that more action is needed to combat ageist attitudes, close the digital divide, and ensure fair treatment for all generations.