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German state inflation points to national uptick as Iran war heats up
Energy price shocks drive German inflation higher, increasing expectations of European Central Bank interest rate hikes.
- On Monday, German inflation rose to at least 2.5% across four states in March, driven by energy price shocks from the U.S.-Israeli war on Iran. The national statistics office will release full data later today.
- Energy price shocks from the conflict have prompted German companies to raise price expectations significantly. Ifo institute data shows the price expectations index rose to 25.3 points in March from 20.3 in February.
- State-Level inflation hit 2.8% in Bavaria, 2.6% in Lower Saxony, and 2.7% in North-Rhine Westphalia. Berenberg Bank chief economist Holger Schmieding warned that higher transport costs will impact many sectors as the conflict continues.
- Financial markets now expect three interest rate hikes this year from the European Central Bank , with the first projected for April or June. Policymakers aim to act early after past misjudgments.
- Economists expect harmonized inflation in the euro zone to reach 2.7% in March, with Tuesday bringing the broader release. Schmieding cautioned that rates could surpass 3% if the war drags on.
26 Articles
26 Articles
The oil prices strongly increased as a result of the Iran war hit consumer prices in Germany. In March, the inflation rate rose to 2.7 per cent, from 1.9 per cent in February, according to the Federal Statistical Office. This is the highest level since the beginning of 2024. According to data from the federal states, the prices of fuels and fuel oil rose strongly at the most important Austrian trading partner. Economists had expected the value n…
The Iranian war has increased the rate of inflation by 0.8 points in the end of the month. At 2.7 percent, it is now at the highest level in two years.
Rising energy prices pushed inflation up to at least 2.5 percent in four German states in March. The latest data suggests that price increases have also picked up again nationwide in Germany.
Germany's annual inflation rate jumped to 2.7 percent in March, the highest level since January 2024, as energy prices soared in the wake of the Middle East war. Energy prices alone rose 7.2 percent year-on-year. Inflation was 1.9 percent in February.
The inflation rate in Germany rose to 2.7 percent in March from 1.9 percent in February, with consumer prices rising 1.1 percent month-on-month, the Federal Statistical Office reported in a preliminary report on Monday. Price growth has picked up again and is moving away from the European Central Bank's target of around two percent.
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