Inflation in Germany has risen to its highest level in about 70 years. Driven by rising energy and food prices, consumer prices in September rose by 10.0 percent compared to the same month last year, as reported by the Federal Statistical Office. However, the “perceived inflation” is three times as high, as a current study shows. The consequences are fatal.
Energy has never been as expensive as it is now. But instead of panicking, you should calmly check potential savings at home. As our guide shows, there are many of them.
“How high do you personally perceive the current inflation to be?” And: “By what percentage has daily life become more expensive in your opinion?” These were the questions of the newly published study by the International University (IU). The result: 34.2 percent. The extremely high inflation perceived by those surveyed creates a bad mood in Germany. Every second survey participant is therefore very worried, and the proportion of women is even over 60 percent, as the inflation study shows. “If I have the feeling that inflation is high, I automatically expect it to get even more expensive,” says Johannes Treu, Professor of Business Administration at the IU of the “Welt”.
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With this, consumers twist their own price rope. The reason: companies exploit this expectation, because because of the fearful expectations, they increase the prices even more, say price experts. This, in turn, leads to higher wages as unions respond to the enormous spending by their workers. After that, companies crank up prices again when they have to pay higher wages and higher producer prices. The result: a fatal wage-price spiral. A purely psychological effect. “Higher inflation expectations can become a self-fulfilling prophecy and boost actual inflation,” says Kerstin Bernoth, researcher at the German Institute for Economic Research (DIW) on “Welt”.
The survey also shows that Germans save the most on energy (35 percent), household goods and travel. Least for alcohol (28 percent), education and the media. Also interesting: Across all areas surveyed, women tend to restrict themselves more than men.
