The other state releases around the same time:
- Brandenburg CPI +% vs +2.0% y/y prior
- Hesse CPI +% vs +2.2% y/y prior
- Saxony CPI +2.6% vs +1.9% y/y prior
- North Rhine Westphalia +2.7% vs +1.8% y/y prior
- Baden Wuerttemberg CPI +2.5% vs +1.8% y/y prior
The readings point to higher headline annual inflation in March than in February with broad monthly increases as well. That is very much expected amid higher energy prices due to the US-Iran conflict. So, we are already seeing the early indications of that with more impact set to follow in the weeks/months ahead.
The monthly readings are also strong as seen below:
- Bavaria CPI +1.2% m/m
- Saxony CPI +1.1% m/m
- North Rhine Westphalia +1.2% m/m
- Baden Wuerttemberg +1.2% m/m
The national estimate later is seen at 2.7%, as compared to the 1.9% in February. So far, the numbers above point to the likelihood that we will get something along the lines of 2.6% to 2.7%. So, we'll see. But either way, it will just reaffirm stronger headline inflation for March.
However, that is not likely to feed through to core prices just yet. As mentioned earlier, it will take time before it shows up in core inflation. But the longer the US-Iran conflict drags on, the higher the risk of stronger price pressures becoming more entrenched and spilling over to core prices and the broader economy.
