BERLIN (Reuters) – German inflation is likely running above 7% in March, regional data from five states suggested, surpassing analyst predictions for federal data that is set to be released later on Wednesday.
The states of Bavaria, North Rhine-Westphalia, Saxony, Brandenburg and Hesse posted annual consumer price inflation in a range between 7% and 8%, coming to an average of 7.54%.
A Reuters poll of analysts pointed to an overall annual CPI rate of 6.3% for March. The EU-harmonized inflation figure (HICP) is projected to come in at 6.7%. In February, the annual CPI rate was 5.1% and the HICP reading 5.5%.
Inflation rates have been driven up mainly by high energy prices, which have been exacerbated by the war in Ukraine.
“Russia’s attack on Ukraine is driving up not only energy costs, but also the price of many agricultural raw materials,” said Timo Wollmershaeuser, head of forecasts at the Ifo economic institute.
“This makes it likely that the rate of inflation will rise to well beyond 5% this year,” said Wollmershaeuser.
The German government’s council of economic advisers said on Wednesday that it expects inflation to reach 6.1% in 2022 before falling to 3.4% next year.
(Reporting by Miranda Murray; Editing by Paul Carrel)
