Germany’s consumer price inflation climbed to 2.7% in March, the highest level in roughly two years, the Federal Statistical Office confirmed. The preliminary figure is up from 1.9% in February and close to January’s 2.9% reading.
Energy was the main driver, with costs for the sector up 7.2% year-on-year. Fuel prices jumped by about 20% and heating oil surged 44.4%, while electricity fell 4.5% and natural gas declined 2.9%, slightly offsetting household energy costs overall. Food prices rose 0.9% year-on-year; sweets were roughly 6% more expensive, while butter and olive oil were nearly 18% cheaper. Net rents increased 1.9% and services advanced 3.2%, partly reflecting higher social and transport service costs after changes to the Deutschland Ticket.
Economists warned the upward trend could continue. Sebastian Dullien of the IMK said the March rise might be only the start, pointing to higher fuel prices in early April and delayed pass-through from wholesale gas and electricity costs. He said the outlook hinges on developments in the Middle East: a sustained ceasefire and restored shipping through the Strait of Hormuz could ease pressure, while renewed escalation could push inflation toward 4%.
The jump in fuel prices has amplified tensions inside the ruling coalition over relief measures. Economy Minister Katharina Reiche (CDU) attacked SPD proposals as costly, ineffective and constitutionally questionable, calling instead for targeted, budget-conscious measures that keep market price signals and rejecting an excess profits tax on legal grounds. Finance Minister Lars Klingbeil (SPD) urged more relief to shield consumers, proposing options such as a mobility bonus or a temporary cut in energy taxes funded by an excess profits levy on energy firms at the European level; he has also backed a flexible price cap for petrol, diesel and heating oil. Coalition leaders will meet in committee to try to bridge their differences.
Klingbeil convened an energy price crisis summit with business and union leaders to assess the economic fallout from Middle East tensions and to explore targeted relief. Chancellor Friedrich Merz said no immediate payouts should be expected but reiterated that the government would act if price rises were sharp and persistent.
Other developments around Germany:
– Lufthansa cabin crew staged strikes that disrupted hundreds of flights, with some 20,000 flight attendants walking out amid stalled wage talks.
– Activists glued themselves to a roadway at a Rheinmetall site in Berlin, blocking an entrance; seven protesters were removed and some received treatment for minor hand injuries. Authorities are probing potential trespassing and resistance charges.
– In Munich, unknown attackers smashed windows and tossed pyrotechnic devices into an Israeli restaurant. No injuries were reported; police and the venue’s management suspect an antisemitic motive and the state security service has taken over the inquiry.
– Far-right Alternative for Germany (AfD) lawmakers met in Cottbus to set policy priorities, discussing economic and energy positions, pensions and social policy ahead of public messaging.
– German space start-up Isar Aerospace aborted a rocket launch from Andøya after detecting a leak in a pressure vessel; the company said the abort will yield useful 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. The decline reflected a smaller model lineup, the end of combustion-engine 718 production and weaker demand in the US and China; new CEO Michael Leiters has outlined cost cuts and a revised model strategy.
The mixed inflation signals — rising fuel and some service costs but lower electricity and certain food items — leave policymakers weighing targeted interventions against the risk of blunting price signals, while geopolitical events continue to add uncertainty to the outlook.