The Iran war made life in Germany skyrocketing in April. Strong increases in energy prices drove the inflation rate to 2.9 percent, the highest level since January 2024, as the Federal Statistical Office confirms preliminary calculations. The Middle East war had already caused the inflation rate to rise sharply to 2.7 percent in March, after 1.9 percent in February.
“The renewed rise in energy prices as a result of the Iran war has increased overall inflation for the second month in a row. The ongoing pressure on fuel prices is particularly noticeable for consumers,” says Ruth Brand, President of the Federal Statistical Office.
Fuel is a quarter more expensive, heating oil a good half
In April, energy prices shot up 10.1 percent due to the rapid rise in crude oil prices. Fuels even rose in price by a good quarter (26.2 percent) and light heating oil by a good half (55.1 percent). Electricity (-4.5 percent), natural gas including operating costs (-3.0 percent) and district heating (-1.1 percent), however, were cheaper than a year before.
Chocolate is significantly more expensive, butter is cheaper
Food prices rose slightly in April. Sugar, jam, honey and other confectionery were noticeably more expensive (+6.6 percent), including chocolate with an increase of 9.7 percent. Meat and fruit also became more expensive (plus 3.6 percent each).
In contrast, the prices for cooking fats and oils fell (-13.9 percent, including butter: -25.4 percent and olive oil: -8.9 percent). In addition, potatoes became cheaper (-14.4 percent), while egg prices rose by almost 15 percent. Goods such as coffee, tea and cocoa also became more expensive, up 11.2 percent, as did tobacco (up 6.2 percent). Consumer electronics became cheaper (-6.1 percent).
Package tours a little more affordable
Services rose in price by 2.8 percent in April compared to the same month last year. Prices for maintenance and repair of vehicles rose (plus 5.0 percent), restaurant visits (plus 3.2 percent) and net rents (plus 1.8 percent). Only a few services were cheaper, including package holidays (-3.5 percent).
Price surge soon for all areas of life?
The price surge has not yet been broad-based, said Silke Tober, inflation expert at the Institute for Macroeconomics and Economic Research (IMK) of the Hans Böckler Foundation. “If the Iran war is ended and the Strait of Hormuz is opened in the coming weeks, the price of crude oil is likely to fall significantly and with it inflation.”
Because expensive energy drives up production and transport costs for companies, there is great concern that the Iran war will affect the entire economy and that prices for food and services will also skyrocket. According to data from the Ifo Institute, a growing number of companies want to raise prices, for example in the catering and retail sectors.
