Almost 50 percent of German citizens are not in a position to afford their current lifestyles, forcing them to make changes in household expenditures, a poll conducted by public broadcaster ARD has shown.
In the
survey, which was conducted between May 30 and June 1 among 1,337 Germans, 47 percent indicated that they are implementing “very severe/severe cutbacks” on their spending. Among households with monthly net incomes exceeding 3,500 euros ($3,752), 29 percent are spending less. This number rose to 53 percent among households with incomes lower than 3,500 euros, and 77 percent among those with incomes lower than 1,500 euros ($1,608).
Region-wise, East Germany was more committed to cutting back on spending, with 59 percent holding such a view. In the West, the number was 44 percent.
The Consumer Price Index (CPI), a measure of inflation, hit 7.4 percent in April 2022, following a 7.3 percent jump in March, according to the German statistics agency Destatis. “The inflation rate thus reached an all-time high for the second month in a row since German reunification,” Dr. Georg Thiel, President of Destatis, said in a May 11
press release.
A recent
survey by pollster Infratest dimap had also shown that inflation was one of the top concerns among German citizens. While 37 percent pointed to the Ukraine war and foreign policy as the most pressing issue, inflation and fuel prices were at the second spot with 23 percent of respondents worried about it.
Finance Minister Christian Lindner called inflation an “enormous economic risk” at a recent press conference in Berlin,
Bloomberg reported. Inflation numbers are squeezing households and increasing pressure on the government, he said while calling for ending the administration’s expansive fiscal policy.
According to ZEW Economist Friedrich Heinemann, the squeeze on households is far from over even though inflation is at its peak.
“Consumers will have to reckon with further increases in prices because many inputs are still scarce and wholesale prices are still increasing dramatically,” he said to the media outlet. “Surprisingly good labor-market data also indicate that the dreaded wage-price spiral could soon pick up speed.”
Meanwhile, rising inflation is also forcing landlords in Germany to consider raising rents, potentially putting more pressure on numerous German families.
Rents have traditionally been stable in the country for many decades. As such, the country has a culture of middle-class families living in rental homes for their entire lives. This makes the issue of rental increase a sensitive issue in the country.
“If inflation is permanently at four percent, rents will also have to rise accordingly each year in the future,” Rolf Buch, overseeing a portfolio of some 565,000 apartments,
told business daily Handelsblatt in an interview published on June 1. “We cannot pretend that inflation will not affect rents.”
