According to the Ifo Institute, the high inflation in Germany is currently affecting richer households more than poorer ones. The reason for this is the composition of the so-called basket of goods, said Timo Wollmershäuser, head of the economic research institute Ifo. “The high prices for fuel and car purchases make up a significantly larger proportion of the monthly expenses of richer households.” According to this, the price of the shopping basket of a household with a monthly net income of over 5000 euros was 4.8 percent higher in October than in the previous year. For households earning less than 1,300 euros, the rate was significantly lower at 4.0 percent. “Compared to 2019, the poorest households currently have to spend 19 euros and the richest households 111 euros more per month on their respective shopping carts, because prices rose faster than the average in the years before the corona crisis,” said Wollmershäuser. It should already be taken into account here that the inflation rates differ between the individual households. The high inflation has economic consequences especially if it hits consumers unexpectedly. Poor households would then have to limit their consumption more, since, unlike richer households, they would not have the means to cope with the additional expenditure.
Ifo Institute – Inflation hits the rich more than the poor – the economy
