Allianz Trade: Perceived inflation in Germany 3 times higher than official inflation

According to research by Allianz Trade, there is a clear difference between consumer-perceived inflation and officially determined inflation in Germany.

Allianz Trade has published the results of its research on real and perceived inflation in Germany.

Consequently, consumer perceived inflation in Germany in May is 18 percent, almost three times the official inflation rate of 6.1 percent.

The research, which reveals several reasons for the discrepancy between perceived and actual inflation, indicated that consumers pay more attention to price changes in commonly purchased drinks, fuel or grocery items and tend to feel that inflation is too much. higher if these prices are higher than the average. .

However, psychological issues, demographic and regional differences, and individual consumer behavior may cause consumers to evaluate price increases differently than official inflation data.

“This creates a skewed picture and a strong mismatch between perceived inflation and actual inflation,” the study said. It was said.

THERE IS A DIFFERENCE IN EUROPE

Recalling that inflation in the European Union has been above 8 percent on average recently, the research said: “Inflation in the euro zone was 6.1 percent a year in May. However, inflation varied widely between countries. In May, this range increased from 2.8% in Greece to 13.0% in Poland and 21.5% in Hungary. information has been given.

Recalling the high dependence of Germany, which has the largest economy in the union, on energy imports from Russia, the energy crisis that arose after the war between Russia and Ukraine caused the energy bill of German households to rise sharply. , and the German government imposed a curb on the price of electricity and gas, he said he responded.

“In the euro area as a whole, the weakness of the euro has increased inflation. Because with the weakness of the euro, commodities traded in dollars, such as oil and gas, have become more expensive.” the evaluation was done.

In the report, it is claimed that Germany has benefited from the strengthening of the euro since the European Central Bank (ECB) raised its interest rates by 400 basis points from July 2022.

Jasmin Gröschl, senior economist at Allianz Trade, stressed that the discrepancy between perceived and actual inflation is not “negligible” because, for example, perceived inflation has a strong effect on consumer behavior when it comes to purchasing behaviour. Therefore, this difference plays an important role for the economy and companies, as well as for the politics of interests”. she used the phrase.

Gröschl emphasized that geographical proximity to Russia, dependence on energy and food imports, government intervention to lower prices, and the strength of the currency in question are the main factors behind inflation. (AA)