Sharply increased prices for gasoline, diesel, and heating oil pushed Germany's inflation rate in March to its highest level in roughly two years. The rate stood at 2.7 percent compared to the previous year, as the Federal Statistical Office in Wiesbaden announced on Friday, confirming its initial estimate. In February, inflation had eased to 1.9 percent. The last time it was similarly high was in January 2024 at 2.9 percent.
Energy product prices in March were 7.2 percent higher than in March 2025. This marked the first year-over-year increase since December 2023, the statistics office emphasized. Fuel was 20 percent more expensive, while the price of light heating oil climbed by 44.4 percent. However, household energy overall was somewhat cheaper, electricity prices were 4.5 percent lower than in the previous year, and natural gas prices fell by 2.9 percent.
Food price inflation initially developed below the average rate, with prices rising just 0.9 percent in March. Chocolate and other confectionery were around six percent more expensive, while butter and olive oil were significantly cheaper than a year ago in March, by nearly 18 percent.
Services were 3.2 percent more expensive in March than in the previous year. As in previous months, social services and passenger transport increased particularly sharply due to the price hike for the Deutschlandticket. Net cold rents rose by 1.9 percent.
"The inflation increase observed so far is only the beginning," declared Sebastian Dullien, scientific director of the Institute for Macroeconomics and Business Cycle Research (IMK) at the Hans Böckler Foundation. "Even if the ceasefire in the Middle East holds, inflation is likely to continue rising in April."
This is because fuel prices in the first third of April were again significantly above March prices. Price increases in the wholesale market for natural gas and electricity would affect consumer prices with a delay, as most people in Germany have longer-term gas and electricity contracts. "In addition, indirect price increases due to increased energy prices are likely to occur in the coming weeks, for example, when delivery services raise their prices due to increased diesel prices."
An increase in inflation above the three-percent mark in the coming months "is not unlikely," Dullien stated. How things develop in the medium term depends centrally on how stable the ceasefire in the Middle East proves to be. "If a renewed escalation of the war is avoided and normal shipping traffic through the Strait of Hormuz is restored, inflation should also decline quickly again." A new escalation of the war, however, would mean a further increase in inflation and could drive it toward four percent.
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