7.8 percent inflation in Bavaria: who can still afford that?

Created: 03/31/2022, 15:15

Inflation has reached a record high in Bavaria.

An overview shows what this means for consumers © Daniel Waschnig Photography/Imago

Inflation has reached a record high in Bavaria.

An overview shows what this means for consumers and how prices have developed.

Munich – The inflation rate is exploding: In Bavaria, it reached 7.8 percent in March, the highest value in almost 50 years, according to the State Statistical Office.

In the federal government it is 7.3 percent.

The

explains the background.

How have prices in Bavaria recently developed?

After the inflation rate fell to 4.9 percent in January, from 5.3 percent in December, there were hopes that this trend could continue.

But it rose again in February – in Bavaria to 5.3 percent (Federal government: 5.1 percent).

Inflation: What are the price drivers?

Heating oil (in Bavaria: +154.9 percent), natural gas (+46.1 percent) and petrol (+53.7 percent).

Price increases: what are the future prospects?

According to economists, consumers must be prepared for further price increases.

One indication of this is the recent rise in producer prices.

For commercial products, the increase in February was 25.9 percent above the level of the same month last year.

Added to this is the fact that the Ukraine war is making energy more expensive, according to Bundesbank President Joachim Nagel.

The Ifo Institute is forecasting an inflation rate of up to 6.1 percent for 2022 as a whole.

That would be the highest inflation since reunification in 1990.

High inflation: What does that mean in concrete terms for consumers?

Higher inflation rates reduce the purchasing power of consumers because they can then afford less for one euro - whether when filling up the gas station or in the supermarket.

In addition: In the Corona * years 2020 and 2021, employees had to accept real wage losses.

In 2021, the strong increase in gross wages of almost 3.1 percent was more than completely eaten up by consumer prices, which rose by a good 3.1 percent.

And no real wage gains are to be expected for this year due to the still rising inflation.

High prices: How does the state provide relief?

In order to make energy and fuel affordable, the energy tax will be reduced for three months.

Gasoline should be 30 cents cheaper, diesel 14 cents cheaper.

In addition, employees receive a one-time energy subsidy of 300 euros on their gross salary and families receive a 100 euro bonus per child on the child allowance.

Is inflation only so high in Germany?

No, throughout the euro area.

In February it was 5.9 percent.

In the USA it was almost eight percent in February, the highest value in 40 years.

What happens if Russian gas stops?

Economist Marcel Fratscher then considers an inflation rate of ten percent to be conceivable.

How prices have developed in Bavaria

Source: Bavarian State Office for Statistics