Purchasing power 2023
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Germans' purchasing power will continue to rise sharply this year. However, this will not compensate for inflation.
For 2023, Nexiga calculates a per capita purchasing power of EUR 25,877. This is a considerable EUR 928 or 3.7% more than in the previous year. At 4.6%, the increase in 2022 was even slightly higher.
Nevertheless, Germans will continue to lose real purchasing power this year, at least on average. This is because the cost-driven inflation triggered by the Ukraine war is more than eating up this gain. The explosion in energy prices is still having an impact on production costs. And so it is not just gasoline, gas and electricity that have become more expensive. Major product groups such as fruit, vegetables and other foodstuffs have become up to 20% more expensive than in the previous year.
As energy products and food are highly volatile, the concept of core inflation was developed, which excludes these segments. This core inflation rate reaches a new high of 5.7% in February 2023. It therefore does not show any easing, but proves that inflation has also reached furniture, transport, gastronomy, culture and services of all kinds, as well as rents.
The adjusted inflation of 7.9% in 2022 was only half offset by wage increases including special payments. In 2021, Germans already suffered Corona-induced real wage losses(real loss of purchasing power) . The basic data on this here.
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The German Federal Statistical Office is currently reporting a consumer price increase of 8.7% for February, although the leading economic institutes expect inflation to fall over the rest of the year. The Kiel Institute for the World Economy (IfW), for example, predicts an inflation rate of 5.4 percent.
Considerable wage increases are currently being won in collective bargaining. It remains to be seen whether this will compensate for the real income losses since 2021, especially as the higher wage costs will of course have an additional cost-driving effect on production and services. The wage-price spiral will therefore continue in 2023.
Map of purchasing power in Germany - the popular marketing tool!
manage customers more efficiently and plan locations, advertising and sales effectively. As an important indicator, knowledge of the forecast purchasing power in 2023 for the whole of Germany can be incorporated directly into the planning of marketing and sales activities and used for microgeographic (finer-grained) area levels.
Purchasing power distribution
The current evaluation, which shows purchasing power in 2023 for the whole of Germany at Municipality level, shows the regional distribution of purchasing power.
Purchasing power is particularly high in and around the major cities. The communities with the highest purchasing power run in a crescent shape through western Germany, from Hamburg to Hanover and the Rhine region with Düsseldorf, the Rhine-Main area around Frankfurt, the Stuttgart region and the Munich area. The communities with the highest purchasing power again include Grünwald near Munich (comparative index 247.7), Wohltorf near Hamburg (205.3) and Königstein im Taunus (191.6). Residents there have around twice as much purchasing power as the national average.
The "poorest" communities include Zittau in Saxony (84.4), Wolgast in Mecklenburg-Western Pomerania (84.7) or Prenzlau in Brandenburg (85.9), all of which are located in the new federal states. However, municipalities in western Germany are also included in this group with low purchasing power. These are cities such as Giessen in Hesse (81.4) or Germersheim in Rhineland-Palatinate (84.7). Trier (85.2) or Bremerhaven (86.0) are also among the cities with low purchasing power.
The East Continues to Catch Up
Although there is still a difference between the west and east, which have greater purchasing power, the municipalities in eastern Germany have once again been able to catch up compared with the previous year. The purchasing power index in the east, excluding Berlin, now stands at 91.6, an impressive 0.9 points higher than in the previous year. The fact that the increase in the minimum wage to EUR 12 has had a greater impact in the east than in the west is likely to have contributed to the further alignment. Due to the lower wage level, relatively more people benefited from this increase.
Every year, Nexiga, as one of the leading providers of location intelligence and geomarketing, determines the purchasing power of German consumers.
For companies, the information from Nexiga's purchasing power map can be valuable because it can be used to identify the most solvent regions in Germany. This information can be incorporated directly into the planning of marketing and sales activities. Business decisions - such as planning new locations or sales channels - can also be underpinned with the help of the purchasing power map.
The term purchasing power used here refers to the share of the resident population's "disposable income". The basis is the recording of the net income of private households. In addition to earned income, this also includes pensions, unemployment benefits, transfer payments (Hartz4), child benefits and investment income. Purchasing power is recorded at the place of residence and therefore does not indicate where the available money is spent.
Sources: Nexiga's own calculations based on data from the DIW (German Institute for Economic Research), the Federal Statistical Office and the Federal Labor Office.