Iran war drives up prices: Inflation in Germany rises to 2.7 percent in March

Economists had expected the value now recorded for March. From February to March, prices rose by 1.1 percent.

“The inflation data shows exactly what all drivers have already noticed: the Iran war is driving up the prices of fuel and heating oil,” said the chief economist at Berenberg Bank, Holger Schmieding. In Bavaria, 44.8 percent more had to be paid for light heating oil than in March 2025. Fuels such as gasoline rose in price by 19.7 percent. With a time lag, the Iran war will also drive up the prices of other goods. “Gas will become more expensive, food prices may rise over time if fertilizer is in short supply, and higher transport costs will affect many categories,” said Schmieding.

Peaks of significantly more than 4 percent are feared

In the coming months, the inflation rate could therefore reach a peak of more than 3 percent. If the war escalates further, a peak of well over 4 percent is possible.

According to a company survey, there are no signs of a rapid easing of tensions, on the contrary: Significantly more companies in Germany are planning to do so in view of rising energy costs Iran war with higher prices. The barometer rose to 25.3 points in March, reaching its highest level in three years, as the Munich Ifo Institute announced. In February it was still at 20.3 points. “The price pressure in Germany is increasing noticeably again,” said the head of the Ifo surveys, Klaus Wohlrabe. Companies would increasingly pass on rising costs. “Energy prices will also have an impact on goods and services through higher production and transport costs,” said Wohlrabe.