Germany’s annual inflation rate was confirmed at 2.7% in March, the highest level since January 2024, driven largely by a sharp rise in energy prices linked to the Iran war, official data from Destatis showed on Friday.
It matched the preliminary estimate and market expectations for March.
Energy prices jumped 7.2% year-on-year, marking the first annual increase since late 2023, with motor fuel prices jumping 20% and heating oil surging 44.4%.
On a monthly basis, consumer prices rose 1.1% in March, as energy costs climbed 7.7%, reflecting higher fuel and heating oil prices amid tensions in the Middle East.
Food prices rose at a slower pace of 0.9% annually, easing from February, while core inflation — excluding food and energy — held steady at 2.5%.
Prices for goods increased 2.3% compared to a year earlier, while services rose 3.2%, continuing to outpace overall inflation, with transport, rents, and social services among the key contributors.
The data came amid the backdrop of a severe energy shock after the Iran war disrupted flows through the Strait of Hormuz, a key artery for global crude and LNG trade.
Brent crude initially climbed toward $120 a barrel after the waterway’s closure before stabilizing around $100, while continued restrictions on shipping have kept supply concerns elevated even with a ceasefire.
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