High inflation hits the rich harder in Germany

The Economics Research Institute stated that high inflation in the country hit rich households harder than poor households.

The results of the “Distributed Effects of Current High Inflation Rates” study of the Economics Research Institute (IFO), one of Germany’s important economics and think tanks, have been published.

In the research, it was stated that the price of the shopping cart of a household with a monthly net income of more than 5 thousand euros increased by 4.8 percent in October compared to the previous year.

In the research, which stated that the increase is 4 percent per year for households earning less than 1,300 euros per month, it was reminded that the average inflation rate in the country has reached the level since the end of 1993 with 4.5 percent in October.

In the calculation of Ifo, the inflation rate in October was 4.4 percent for households with a net income between 1,300 and 1,700 euros, and 4.6 percent for income classes from 1,700 to 5,000 euros.

In the study, the following was noted:

“Compared to 2019, the poorest households now have to spend €19 more on shopping carts and the richest households €111 more per month, as prices are rising faster than the average in the years before the corona crisis. High inflation rates have economic consequences, especially as they hit consumers unexpectedly. “This (high inflation) reduces the purchasing power of consumers. Because their incomes do not increase at the same rate as the cost of living. Poor households are forced to further limit their consumption.”

Timo Wollmershauser, Director of Research and Economic Forecasts at Ifo, said in his assessment that the difference in inflation rates between rich and poor households depends on the composition of the shopping cart. used the phrase.


Source: bigpara- GÜNDEM by bigpara.hurriyet.com.tr.

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