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Real vs. perceived inflation

Germans estimated the inflation rate in May of this year at 18 per cent, according to a study by the credit insurer Allianz Trade. The official inflation rate, on the other hand, was only 6.1 percentage points. With a gap of almost twelve percentage points between real and perceived inflation in Germany than in the Eurozone as a whole (nine percentage points).

The main reason for the discrepancy between estimates and reality is that frequently purchased goods such as food or fuel dominate consumer perceptions.

Price stability or even price declines for other goods and services tend to remain under the radar.

This is not only a psychological problem, but also a cyclical one - because the

higher the perceived inflation, the more consumers restrict their spending. "This

discrepancy thus plays an important role for the economy and businesses in particular, as well as for interest rate policy

important role," points out Jasmin Gröschl, senior economist at Allianz Trade.


Bild von K. H. J. / MCI auf Pixabay

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