In March 2026, the annual growth rate of consumer prices in the Eurozone reached 2.6%, the highest level since March 2024. This data was released by Eurostat in its final report, noting that inflation exceeded the previous estimate of 2.5%.
This is reported by Finway
Energy as a Key Driver of Inflation
Price increases in the Eurozone have once again surpassed the European Central Bank’s target level of around 2%. The main factor behind the acceleration of inflation has been the rising cost of energy, which has intensified amid geopolitical instability in the Middle East. Currently, the energy sector is exerting the primary pressure on price dynamics in the Eurozone, affecting various sectors of the economy.
Core Inflation and Market Expectations
Despite some fluctuations in the overall index, core inflation remains elevated. Specifically, the core CPI index in March stood at 2.3%, and the cost of services increased by 3.2%. This indicates that inflationary pressure is being sustained not only in the energy sector but also in the services sector, which traditionally reacts more slowly to changes.
“The Eurozone economy is entering a phase where energy shocks are once again defining inflation dynamics, and regulators are forced to balance between curbing prices and supporting economic growth. The ECB openly acknowledges the risk of a renewed inflation surge and states its readiness to respond if energy pressures persist.”
Amid current risks, market analysts expect that the European Central Bank will refrain from changing interest rates at its April meeting. The regulator is assessing threats such as further increases in energy prices, volatility in global markets, and potential secondary inflation effects, particularly due to rising wages and service costs.
Experts warn that the current level of inflation may remain high going forward. According to ECB estimates, if energy prices continue to rise, inflationary pressure could persist until 2027. In a pessimistic scenario, inflation in 2026 could reach 4.2%, and in 2027, 6.3%.
It should be noted that the war in the Middle East has already impacted global oil prices, which could add between 1.5 to 2.8 percentage points to inflation in Ukraine. This was reported by the head of the National Bank of Ukraine, Andriy Pyshny, during a speech in Washington at the IMF and World Bank events.