Germany: Inflation rises in March from February
Latest reading: Harmonized consumer prices increased 2.8% on a year-on-year basis in March, following a 1.9% increase in the prior month, after the Iran war boosted energy costs. March’s reading was the strongest since December 2024.
Relative to the previous month’s data, there were higher price pressures for transportation (+6.7% on a year-on-year basis vs +2.2% in February), housing and utilities (+0.8% vs +0.5% in February) and restaurants and hotels (+3.4% vs +3.2% in February). In contrast, there were reduced price pressures for food and non-alcoholic beverages (+1.5% vs +1.9% in February) and recreation (+2.0% vs +2.1% in February).
Meanwhile, consumer prices increased 2.7% in March, following a 1.9% rise in the prior month.
Finally, harmonized consumer prices increased 1.16% in March on a month-on-month basis, following a 0.38% increase in the previous month.
Panelist insight: Commenting on the outlook, ING’s Carsten Brzeski stated:
“All in all, today’s German inflation data shows that, for the time being, the new inflation wave stemming from the war in the Middle East is ‘only’ an energy price shock. […] For now, however – at the risk of using a forbidden word, at least at the ECB – the energy price shock falls under the label of ‘transitory’.”