Status: 11/08/2022 12:47 p.m
According to calculations by the ifo Institute, the rapid increase in energy prices is costing Germany almost 110 billion euros in real income. This corresponds to about three percent of economic output.
According to the ifo Institute, the increased gas and oil prices are sucking billions of euros out of the German economy. For the current year, the real income losses added up to around 64 billion euros or 1.8 percent of economic output, as the Munich researchers announced today. Last year it was a good 35 billion euros or 1.0 percent.
“Next year, a good nine billion euros or 0.2 percent of economic output will probably be added,” said Timo Wollmershäuser, head of ifo economic forecasts. Taken together, the loss of real income is almost 110 billion euros or 3.0 percent of the annual economic output. Real incomes are incomes adjusted for inflation. The billions lost are then the sum that flows out of Germany to pay for the much more expensive energy imports abroad.
Only in the second oil crisis was the loss higher
“Only during the second oil price crisis in the years from 1979 to 1981 was it even higher at four percent of economic output,” said Wollmershäuser on the real loss of income. The overall economic loss of purchasing power from 1979 to 1981 could not have been compensated for until 1986. At that time, the price of oil began to fall sharply, while at the same time the Deutsche Mark appreciated noticeably against the dollar. As a result, energy imports, most of which are settled in US currency, became cheaper.
“The current decline in real income is likely to persist in the coming years,” the expert expects. “On the one hand, energy prices will remain high after Russia is no longer a supplier. On the other hand, Germany’s dependence on imported energy will not change anytime soon.”
This has a particular impact on consumers. Wollmershäuser and his colleague Wolfgang Nierhaus assume that German companies will initially be able to increase their export prices much less sharply than import prices. “A good part of the higher prices for imported energy should therefore be borne by the domestic end consumers,” write the scientists.
High prices do not benefit employers
According to the institute, in the distribution discussion it is important to quantify how much real income flows to other countries. These losses represent the part of the economic output generated in Germany that has to be sent abroad to settle the import bill and cannot be distributed domestically. According to the Munich economists, employees will receive correspondingly less in collective bargaining and salary negotiations. The institute published the study against the background of the current collective bargaining round in the metal and electrical industry.
“When it comes to wage negotiations, it must be taken into account that the high prices for goods and services produced in Germany are not the result of a boom that is making company profits soar,” said Wollmershäuser. “Above all, they reflect the high costs that have to be paid for imported energy and primary products.” The income to be distributed between employees and companies must therefore be corrected for the real income losses.
Consumers have to pay significantly more
Energy prices have skyrocketed at times in recent months. According to the comparison portal Check24, about households with oil heating had in September and October 2022 Pay 76 percent more. The monthly costs have risen to 349 euros. “Consumers are paying more for heating this winter than ever before,” says Steffen Suttner, Managing Director of Energy.
Gas customers also have to dig much deeper into their pockets. According to calculations based on information from the comparison portal Check24 for the basic supply and the Federal Association of Energy and Water Management for special contracts, you have to pay an average of 310 euros per month for the basic supply for standard household annual amounts of 20,000 kilowatt hours of gas – almost 200 euros more than last year. For customers with special contracts, it is now an average of 255 euros per month, which means an increase of almost 140 euros.
However, the strong increase in gas prices will affect German households to different extents depending on the region. According to a recent analysis by the comparison portal Verivox in Bremen, consumer prices for gas only rose by 43 percent, while in North Rhine-Westphalia they rose by a whopping 90 percent. On average, the year-on-year increase was 83 percent.