German inflation in March jumped to its highest level since January 2024 on the back of rocketing energy prices due to the Middle East war, official data showed Monday.
Consumer prices rose by 2.7 percent compared with the same month a year earlier, according to preliminary data from the federal statistics agency Destatis.
Energy prices alone rose by 7.2 percent from a year earlier — the first time they had risen since December 2023, the agency said.
March’s overall annual inflation rate was up sharply from the 1.9 percent recorded in February, though it was below the 2.8 percent expected by analysts surveyed by financial data platform FactSet.
The war in the Middle East that began on February 28 when the United States and Israel started bombing Iran has sent oil and gas prices soaring worldwide.
It has led to the near-total closure of a key energy transit route through the Strait of Hormuz, as well as attacks on energy facilities around the Gulf.
The impact has been especially painful in Germany, which is heavily dependent on fossil fuel imports.
As part of the government’s response, petrol stations in Germany will be obliged to limit their price rises for petrol and diesel to once per day from Wednesday.
Germany is also considering the introduction of a windfall tax on hefty energy-sector profits.
Economy Minister Katherina Reiche said after a meeting with other G7 ministers and central bank officials Monday that German energy firms are working to secure longer-term gas supply contracts with more diverse suppliers.
“By hedging with long-term supply contracts, we also protect ourselves against price fluctuations,” Reiche said.
She also urged a “pragmatic” approach to EU climate regulations on methane, a highly potent greenhouse gas. The rules, she warned, can “complicate” liquified natural gas (LNG) imports to Europe.
The European Central Bank last week warned of higher inflation in the eurozone and lower growth due to the war.
Analysts have raised their bets on the central bank hiking borrowing costs as soon as next month in a bid to keep a lid on an expected surge in consumer prices.
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