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The fuel rebate has slowed the surge in inflation in Germany caused by the war in Iran. In May, consumer prices were 2.6 percent higher than in the same month last year. In the previous month, inflation had stood at 2.9 percent. (File photo)
Keystone
The fuel rebate has slowed the surge in inflation in Germany caused by the war in Iran. In May, consumer prices were 2.6 percent higher than in the same month last year, as the Federal Statistical Office announced on Friday.
As recently as April, the oil price shock resulting from the war in Iran had driven the inflation rate to 2.9 percent, its highest level since January 2024. Germans had to pay 6.6 percent more for energy products than a year earlier.
This marked a significant slowdown in price inflation: in April, energy prices had still risen by 10.1 percent. Food prices rose by a comparatively modest 0.4 percent in May.
Overall, consumer prices in May actually fell by 0.2 percent compared to the previous month of April.
However, the government-mandated relief at the pump will soon come to an end: The reduction in the energy tax on gasoline and diesel by just under 17 cents per liter, in effect since May 1, expires at the end of June.
According to economists, the future course of inflation in Germany depends crucially on further developments in the Middle East. A quick resolution to the conflict does not appear likely at this time. Prices for food and services could rise as companies pass on higher energy, production, and transportation costs.
The “Council of Economic Experts” expects an annual average inflation rate of 3.0 percent for Germany. However, it could also reach 3.5 percent, as the federal government’s advisory body calculates in its spring report: Given the war in the Gulf, the supply of crude oil and liquefied natural gas could be constrained for an extended period. The situation in the Strait of Hormuz, a key chokepoint for global oil and gas trade, remains fragile.
Higher inflation rates erode consumers’ purchasing power: they can then afford less for a euro. Following the price surge caused by the war in Ukraine, inflation subsided, with the inflation rate in Germany standing at a comparatively moderate 2.2 percent in 2025. However, many prices have risen permanently.
12.06.2026, 09:40
