The effects of the war in the Middle East are slowly becoming visible in hard inflation data. Germany revealed its statistics just before the presentation of data for the entire euro zone.
“In April, inflation in Germany rose to 2.9%. due to the sharp increase in energy prices“- writes Reuters.
However, this result turned out to be lower than analysts' forecasts, which predicted an increase of 3 percent, while core inflation, which does not take into account volatile food and energy prices, fell to 2.3 percent. from 2.5 percent
This means another acceleration of price increases. In March, inflation was 2.7 percent, up from 1.9 percent. recorded in February 2026
For comparison, in Poland in February prices grew at a rate of 2.1 percent, and in March the increases accelerated to 3 percent.
Inflation in Germany. Economists breathed a sigh of relief
“Inflation in Germany rose in April as a result of a sharp rise in energy prices caused by the conflict in Iran, though the decline in core inflation indicates that cost pressures have not yet spread to the broader economy” – points out Reuters.
The agency emphasizes that economists welcomed it lack of the so-called second round effectsin which higher costs of basic goods such as energy and food are passed on from companies to consumers and lead to higher wage demands. At the same time, they warned that this situation may change if the conflict continues.
German officials reported a sharp increase in oil and natural gas prices of 10.1 percent. on a year-to-year basis. This is the highest dynamics since February 2023.
See also: The German Chancellor talks about a dangerous situation. It's about Iran and the USA
“In the coming months, there will be side effects in the form of increases in transport costs, food prices and other industrial products” – says Carsten Brzeski, economist at ING.
“Needless to say, the longer the war in the Middle East and the blockade of the Strait of Hormuz lasts, the greater the likelihood that the initial energy price shock will not only have spillover effects, but it may also result in additional frictions in the supply chain and, consequently, a self-reinforcing inflationary spiral“- he adds.
The economist predicts that inflation in Germany will probably increase even more, reaching approximately 4 percent. until summer.
Inflation in the euro zone and the ECB's decision ahead of us
The German government has already factored higher energy prices into its updated economic forecasts and now expects them to inflation will accelerate to 2.7%. this year and 2.8 percent in 2027 compared to 2.2 percent last year.
Data from Germany appear before Thursday's publication of inflation data in the euro zone. According to economists, inflation in the euro zone will accelerate to 2.9 percent in April. with 2.6 percent in the previous month.
The European Central Bank is expected to keep interest rates unchanged at its meeting on Thursday, but increases will likely be considered at its next meeting in June.
