Germany's inflation rate is likely to rise further in March. The European Central Bank may raise interest rates earlier.

The US-Israeli war pushed up energy prices, causing the inflation rate in several German states to rise significantly in March. This indicates that the national inflation level may also increase further in the data to be released later on the same day.

According to a report by Reuters, in North Rhine-Westphalia, the most populous state in Germany, the inflation rate rose by 2.7% year-on-year in March, higher than 1.8% in February. The inflation rates in Bavaria, Baden-Württemberg and Lower Saxony also increased simultaneously, reaching 2.8%, 2.5% and 2.6% respectively.

Economists predict that Germany's harmonized inflation rate for March will rise from 2.0% in the previous month to 2.8%. The German Federal Statistical Office is expected to release the relevant data on Monday (March 30th) afternoon.

Just before the release of German data, the inflation figures for the Eurozone will be announced on Tuesday. According to a survey by Reuters, economists predict that the inflation rate in the Eurozone will rise to 2.7% in March.

The US-Iraq war has significantly pushed up global energy prices. Central bank policymakers in Europe are currently discussing whether and under what circumstances it is necessary to raise interest rates in order to prevent the rise in energy prices from further spilling over to other goods and service prices.

The financial market currently expects that the European Central Bank may raise interest rates three times this year. The first rate hike is likely to occur in April or June. This expectation is based on the policymakers' desire to take action as soon as possible to avoid repeating the mistakes in their judgment of inflation trends that occurred between 2021 and 2022.