German inflation accelerated in March due to surging energy prices against the backdrop of the Iran war, and economists see further increases ahead.
Inflation, which is EU-harmonised, reached 2.8% year-on-year, preliminary data from the federal statistics office showed on Monday. The figure was in line with an analyst forecast that saw inflation jumping to 2.8% from 2.0% in February.
Energy prices were up 7.2% on the same month of the previous year, posting the first increase since December 2023.
Core inflation, which excludes volatile food and energy prices, was unchanged from the previous month at 2.5%.
So far, the Iran conflict has seemingly not affected other prices, said Ralph Solveen, senior economist at Commerzbank.
However, the longer the war continues and causes energy and other raw materials to become more expensive or scarce, the more likely it is that underlying inflation will also pick up, as business surveys already suggest, Solveen said.
