Economic Buzz: Eurozone inflation rises sharply in March on higher energy prices

Eurozone inflation increased to 2.5% in March, according to preliminary data from Eurostat. This is up from 1.9% in February and is above the European Central Bank target of 2%.

The rise was mainly due to a sharp increase in energy prices following the military actions by the United States and Israel against Iran at the end of February.

Energy prices rose significantly, with inflation in this category jumping to 4.9% in March from -3.1% in February. Other components showed mixed trends, with services inflation at 3.2% (down from 3.4% in February) and food, alcohol and tobacco at 2.4% (slightly lower than 2.5% in the previous month).

The European Central Bank has updated its outlook and now expects euro zone economic growth of 0.9% in 2026, with average inflation projected at 2.6% for the year.

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