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Energy shock drives German inflation higher, with price increases accelerating in several states

Energy shock drives German inflation higher, with price increases accelerating in several states

金十金十2026/03/30 10:18
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Golden Ten Data reported on March 30 that, driven by the energy price shock stemming from the US and Israel war with Iran, the inflation rate in four German federal states rose to at least 2.5% in March. This indicates that the nationwide inflation data, to be published later, may also trend higher. In North Rhine-Westphalia, Germany's most populous state, the annual inflation rate in March jumped to 2.7% from 1.8% in February. This upward trend is also reflected in Bavaria, Baden-Württemberg, and Lower Saxony, where inflation rates rose to 2.8%, 2.5%, and 2.6% respectively. Economists predict that Germany's harmonized inflation rate in March will climb to 2.8% from 2.0% the previous month. Holger Schmieding, chief economist at Berenberg Bank, stated that although the current increase is driven by the energy price shock, a comprehensive price surge triggered by the Iran war is only a matter of time. "Over time, food prices may rise due to fertilizer shortages, and higher transportation costs will affect multiple industries," he added. He further noted that if the conflict continues, inflation could exceed 3%. Financial markets currently expect the European Central Bank to raise interest rates three times this year, with the first hike likely in April or June.
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