Germany’s inflation rate rose to 2.7% in March, the highest in about two years, driven largely by surging energy prices. The Federal Statistical Office confirmed the preliminary figure, up from 1.9% in February and close to January 2024’s 2.9%. Energy costs climbed 7.2% year-on-year, with fuel up around 20% and heating oil soaring 44.4%. Electricity fell 4.5% and natural gas dropped 2.9%, slightly easing household energy bills overall. Food prices increased 0.9%, with sweets about 6% more expensive while butter and olive oil were nearly 18% cheaper. Net rents rose 1.9% and services advanced 3.2%, influenced by higher social and transport service costs including changes to the Deutschland Ticket.
Experts warned the uptick may continue. Sebastian Dullien of the IMK said the rise so far could be just the beginning, noting higher fuel prices in early April and delayed pass-through from wholesale gas and electricity costs. He said the outlook depends heavily on Middle East stability: a sustained ceasefire and normal shipping through the Strait of Hormuz could ease pressure, while renewed escalation could push inflation toward 4%.
Political fallout and policy debate
The spike in fuel prices has deepened divisions within the ruling coalition over relief measures. Economy Minister Katharina Reiche (CDU) criticized SPD proposals as costly, ineffective, and constitutionally questionable, urging targeted, budget-friendly measures that preserve price signals and rejecting an excess profit tax on legal grounds. Finance Minister Lars Klingbeil (SPD) argued further relief is needed to counter inflation, proposing a mobility bonus or temporary reduction in energy taxes funded by an excess profit tax on energy firms at the European level. Klingbeil has also backed a flexible price cap on petrol, diesel and heating oil. Coalition leaders are set to meet in a committee to try to resolve the dispute.
Vice Chancellor Klingbeil called an energy price crisis summit with business leaders and unions to assess the economic impact of tensions in the Middle East and explore targeted relief. Chancellor Friedrich Merz said no immediate relief should be expected but the government would act if prices rise sharply and persistently.
Strikes, protests and other news
– Lufthansa cabin crew staged a strike affecting hundreds of flights, with some 20,000 flight attendants walking out amid stalled wage talks.
– Activists protested at a Rheinmetall facility in Berlin by gluing themselves to a roadway, blocking an entrance; seven were removed by police, some treated for minor hand injuries. Investigations into trespassing, coercion and resisting law enforcement are under way.
– In Munich, unknown assailants smashed windows and threw pyrotechnic devices into an Israeli restaurant. No one was hurt; police and the restaurant’s management suspect an antisemitic motive and the state security service has taken over the investigation.
– Far-right Alternative for Germany (AfD) lawmakers met in Cottbus to set policy priorities, discussing economic and energy papers, pensions and social policy and preparing to present outcomes publicly.
– German space startup Isar Aerospace aborted a rocket launch from Andøya after detecting a leak in a pressure vessel; the company said launch aborts provide valuable data as it pursues reliable access to orbit.
– Porsche reported a 15% year-on-year drop in global deliveries in the first quarter, delivering just under 61,000 cars. Declines were driven by a reduced model lineup, the end of combustion-engine 718 production, and weaker US and Chinese demand; the company’s new CEO Michael Leiters plans cost cuts and a revised model strategy.