2026-03-30 14:00
publication
2026-03-30 14:00
As expected, March brought a strong gust of inflation in Europe. Data from Germany published today allow us to expect that March HICP inflation will not exceed 3% in the entire euro zone.
CPI inflation in Germany in March 2026 it was 2.7% – results from preliminary estimates presented by Destatis. This is clearly more than in January, when the basket of consumer goods prices increased by 1.9%.
German consumer inflation thus broke the chain of the European Central Bank's 2 percent target. However, such a reading was not a surprise, as the median of economists' forecasts assumed an acceleration of German CPI inflation to 2.7%.
This is a derivative of the fuel shock that occurred in response to the blockade of the Strait of Hormuz. According to German statisticians, energy prices increased by 7.2% year on year. Compared to the previous month, the entire German “inflation basket” increased in price by 1.1%. This was the highest increase in nearly 4 years.
The jump in fuel prices has not yet spread to the rest of the economy. At least this is the conclusion that core inflation would suggest. Prices excluding food, fuel and energy increased only by 2.5% year on year – that is, at the same pace as in February and January. Here, the increased dynamics of service prices, which in March 2026 were on average 3.2% higher than a year ago, continues to have a negative impact. Goods prices increased by 2.3%, food prices by 0.9%, and energy prices were 7.2% more expensive than in March '25.
Even before the weekend, we learned the preliminary CPI inflation reading for Spain, which amounted to 1.0% m/m and accelerated to 3.3% per year (compared to 2.3% y/y recorded in February). On Tuesday we will receive data from France, where consumer inflation is expected to increase from 0.9% to 1.6%. Such results allowed us to expect that in the entire euro area the March HICP inflation would not exceed 3%.
K.K
