Germany's Inflation Hits 2-Year High Amid Iran War

(MENAFN) Germany's inflation rate surged to 2.9% in April 2026 — its steepest reading since January 2024 — as energy prices continued their upward march in the wake of the Iran war, the Federal Statistical Office (Destatis) announced Tuesday.

The acceleration marks the second consecutive monthly increase, following inflation readings of 2.7% in March 2026 and 1.9% in February — a rapid climb that is placing growing strain on German consumers.

"Overall inflation increased for the second consecutive month as a result of another rise in energy prices that was due to the Iran war. Consumers are particularly feeling the persistent price pressure regarding motor fuels," said Ruth Brand, president of the Federal Statistical Office.

On a monthly basis, consumer prices climbed 0.6% in April compared to March. Household energy and fuel costs bore the sharpest increase, surging 10.1% year-on-year in April — a figure that underscores the direct economic toll of the ongoing regional conflict.

Germany's Economy Ministry has already moved to revise its outlook downward, trimming growth forecasts for both 2026 and 2027 while lifting inflation projections, citing the dual pressures of elevated energy costs and softening external demand.

Chancellor Friedrich Merz issued a sobering warning on April 13, cautioning that the Iran war would leave lasting scars on the global economy, with Germany bracing for an extended period of economic strain.

"We will feel the consequences of this war for a long time to come, even after it is over," Merz said during a press conference in Berlin.

The deteriorating outlook comes despite Germany having approved a landmark 500 billion euro ($584 billion) infrastructure fund last year, designed to reignite investment and shore up growth following a prolonged stretch of economic weakness.

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