The rise in energy prices is being exacerbated by the war in Ukraine and an imminent freeze on oil and energy supplies from Russia.
(Photo: dpa)
Frankfurt According to provisional calculations by the Federal Statistical Office, prices in Germany rose by 7.3 percent in March compared to the same month last year. On average, experts had expected a value of 6.3 percent, in the previous month the consumer price index was 5.1 percent.
The main drivers are energy costs, the increase in which is being exacerbated by the war in Ukraine and an imminent stop in oil and energy supplies from Russia.
The data for the euro area as a whole, which are decisive for the monetary policy of the European Central Bank (ECB), will be announced on Friday. Here the price increase in February was 5.9 percent, according to the Bloomberg data service, economists expect 6.3 percent for March.
However, there are major differences between individual forecasts: Commerzbank, for example, expects 7.7 percent for the euro area. Most recently, the average forecasts were exceeded. That’s reflected in data for Spain that came out on Wednesday, with the actual rate rising to 9.8 percent from 7.6 percent in the previous month and 8.0 percent expected by economists.
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Few economists gave early warning
Last year, only a few economists, including Mohamed El-Erian and Olivier Blanchard, warned early on that inflation would rise sharply; they had their sights set primarily on the USA, where inflation recently reached 7.9 percent.
Like the US Federal Reserve (Fed), the ECB initially expected inflation to subside quickly and has since had to correct itself. Meanwhile, many economists, such as Jari Stehn from Goldman Sachs and Joachim Fels from Pimco, predict a further increase in inflation until the summer, but then a significant flattening out.
>> Read also: These ten points show the drama on the commodity markets
Speaking in Nicosia on Wednesday, ECB President Christine Lagarde said the war in Ukraine would mean slower growth and higher inflation, Reuters reported. Members of the ECB Council such as Bundesbank President Joachim Nagel and ECB Vice President Luis de Guindos had recently emphasized to the Handelsblatt that the ECB would react flexibly to incoming data.
More: Politicians must respond to the threat of stagflation.