BERLIN, March 30 (Xinhua) -- German inflation in March rose to its highest level since January 2024, as a surge in energy prices driven by escalating tensions in the Middle East pushed up costs across the economy, official data showed on Monday.
The inflation rate climbed to 2.7 percent in March, up from 1.9 percent in February and around 2 percent in recent months, according to the Federal Statistical Office (Destatis).
Energy prices increased by 7.2 percent year-on-year, reversing a downward trend and marking their first rise since December 2023, Destatis said. By contrast, price growth in services and food remained broadly unchanged.
The data underscores a renewed inflationary impulse from energy costs, which had eased after surging during the Russia-Ukraine conflict but remain above pre-crisis levels.
"A first inflation wave is clearly on its way (as the conflict in the Middle East has entered its fifth week)," said Carsten Brzeski, global head of macro at ING Research, in an analysis on Monday. He said the current surge was mainly driven by energy prices, with knock-on effects on transport, industrial goods and food likely to follow.
In a monthly report published last week, the Deutsche Bundesbank warned that rising energy prices linked to the Middle East conflict were weighing on both businesses and households and could drag on Germany's economic growth in the first half of the year.
The central bank expects inflation in Europe's largest economy to pick up further in the coming months, potentially reaching around 3 percent in the near term. A prolonged conflict could keep inflation elevated for longer, it added.
Higher oil, gas and even electricity costs are also feeding into German companies' pricing plans. A survey by the Munich-based ifo Institute on Monday showed its price expectations index jumped to 25.3 points in March from 20.3 in the previous month, hitting the highest level in three years. ■