So far, research institutes have not been able to quantify the impact of extreme weather conditions on inflation in Germany, but there are clear trends. "If ships on the Rhine can only carry a fraction of their usual cargo, transport costs per metric ton will rise significantly," Torsten Schmidt, an economist at the RWI – Leibniz Institute for Economic Research, told DW. He added that this would drive up the cost of energy sources, such as diesel and heating oil, which are in large part transported by water.
He said that higher costs would be passed on to consumers. For its data, the Food and Agriculture Organization of the United Nations (FAO) takes into account the effects of global warming, extreme weather and crop losses. According to the FAO, food prices are currently about 30% higher than in 2020, with meat and oilseeds rising sharply since then.
Recent studies also suggest that climate change and extreme weather events are affecting inflation rates, as are supply bottlenecks as well as gas and oil price shocks caused by the US-Iran and Russia-Ukraine wars. A study conducted by the European Central Bank (ECB) and five European research institutes entitled "Climate extremes, food price spikes, and their wider societal risks" that was published in July 2025, warned against escalating inflation. "Central bank mandates for price stability may become increasingly challenging to deliver if more frequent extreme weather events make food prices less stable domestically and in global markets," the study states.
Higher coffee prices in Brazil or Vietnam can also affect inflation in the EU. These challenges could become even more trying if temperature rises have a long-term effect on inflation. If inflation has to be dealt with by higher interest rates, economic growth will also be hampered.
In 2023, the ECB published a study called "The asymmetric effects of weather shocks on euro area inflation" that reached a similar conclusion after examining the four largest European Union economies. "With a changing climate implying an increased frequency and severity of extremes in Europe, the shocks studied here can be expected to occur more frequently and could lead to persistent upward pressures on inflation, especially from extreme temperatures in summer," it read. "Given the differing impacts of shocks in different seasons and across countries, our results also suggest that climate change could enhance heterogeneity of inflation developments across euro area countries." According to the ECB, the inflation rate in the euro area in June this year ranged from 2% in France to 5.4% in Lithuania.
At 2.4%, Germany was slightly below the EU average of 2.8%. High transport costs, at 5.3%, are driving inflation. Whether the ECB will raise key interest rates again in view of increased costs on waterways remains to be seen.
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