- Prior +1.9%
- HICP +2.8% vs +2.8% y/y prelim
- Prior +2.0%
This just reaffirms the initial estimates, with German headline inflation spiking amid higher energy prices from the US-Iran conflict. Destatis notes that: “Significant price increases for energy products are driving inflation. In particular, fuels and heating oil have become dramatically more expensive for consumers since the beginning of the war.”
Of note, energy price inflation was seen up 7.2% compared to the same month last year. This was a decrease of 1.9% instead in February last month. Much of that was led by a surge in fuel prices, which were up 20% year-on-year.
As for the more important metric i.e. core annual inflation, that is seen at 2.5%. So, that is still holding thereabouts since the beginning of the year. However, expect higher energy prices to eventually feed through to other aspects of the economy and in turn drive up core prices too. That especially if the Middle East conflict does not ease in the week(s) ahead.
Looking at the more detailed breakdown, food price inflation was seen up by 2.3% year-on-year. Meanwhile, services inflation continues to run hot at 3.2% year-on-year. The latter remains a key sticking point in keeping more stubborn price pressures in Germany.
