Poorer households have had to spend their entire income to cover their living expenses. The increase in price leads to reduced consumption, higher debt and a switch to cheaper but less high-quality products, writes Wifo in its current “Research Brief”.
That ten percent of households with the lowest income can only finance 68 percent of their consumer spending, the rest has to be covered by savings or debt. The 30 percent of households with the lowest incomes cannot cover their consumer spending from current income.
Housing and energy is the largest spending category among poorer households. According to Wifo, the discussion about inflation should focus on housing expenses.
Source: Nachrichten
