Compared with previous years, the increase is nevertheless something of a comedown. Germans will continue to lose real purchasing power this year, at least on average.
Purchasing power lets us know many things....
- Know where to find consumers with purchasing power.
- Know where locations with appropriate clientele make sense.
- Knowing where products or services find sales in line with purchasing power levels.
Backgrounds
The reason for this assessment: The cost-driven inflation triggered by the Ukraine war more than eats 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.
