Private consumption is an important pillar of the economy. According to the latest calculations by the Federal Statistical Office, the curve is clearly pointing upwards again – despite the sometimes sharp rise in prices.
The lifting of most corona restrictions boosted private consumption in Germany last year despite the sharp rise in inflation.
However, adjusted for price increases, the pre-crisis level in 2019 was still 1.3 percent short, as the Federal Statistical Office announced on Wednesday. Compared to the previous year, consumer spending by private households increased by 3.4 percent. Measured in current prices, an increase of 10.7 percent was recorded. The difference reflects high inflation, which averaged 6.9 percent over the past year.
In addition to the price increases, the abolition of almost all corona restrictions influenced people’s consumer behavior. For example, spending on services, which include catering and travel, rose by 8.3 percent on a price-adjusted basis compared to 2021, when many restrictions to combat the pandemic were still in place. Private consumption is an important pillar of the German economy.
Less food for more money
Last year, private households consumed 4.4 percent less food and non-alcoholic beverages than in the previous year, but spent 7.8 percent more money on them in view of the rise in prices. The proportion of total expenditure was 11.5 percent. In the previous two years, this had reached almost 12 percent due to home office and the corona restrictions in the catering trade.
The consequences of the sharp increase in energy prices were clearly evident in the past year. Expenditure by private households increased by 19.3 percent in current prices for electricity and 13.9 percent for gas compared to the previous year. Adjusted for price increases, expenditure on electricity (minus 0.5 percent) and gas (minus 26.4 percent) fell. Due to warmer weather conditions and savings, private households would have used significantly less gas than in the previous year, explained the Wiesbaden authority.
The savings rate fell by almost 4 percentage points to 11.4 percent compared to the previous year and is thus approaching the pre-crisis level again. For every 100 euros of disposable income, an average of 11.40 euros was set aside.
Source: Stern
