Berlin (The Times Groupe)- Germany’s most pressing concern is inflation, says the German Chancellor Olaf Scholz. rising prices
The German Chancellor expressed concern about the pace of price increases in Europe’s biggest economy, signaling he hasn’t ruled out more measures to cushion the burden on households and companies.
Euro-area consumer-price growth hit 7.5% last month — almost four times the European Central Bank’s 2% target, due to the Russia-Ukraine war sapping growth and causing already record inflation. There is a growing consensus among policy makers that a July rate hike is inevitable, which would be the first such move in more than a decade.
Soaring consumer prices are currently the number one cause of concern for Germans, according to a recent survey. In fact, inflation is causing more concern among Germans than the Coronavirus and the war in Ukraine.
Germany’s inflation rates hit a historic 40-year high last month, making inflation a major headache for consumers. Almost everything has been affected by the rising prices, from supermarket prices to the cost of energy. A recent survey by McKinsey management company revealed that this has become more of a cause for concern in Germany than the Coronavirus pandemic and the war in Ukraine combined.
Almost 1,000 Germans were asked about their most pressing concerns in the survey. Around 40 percent of respondents expressed concern about inflation, and 29 percent said that rising prices would force them to restrict their lifestyles. Two-thirds of respondents expect prices to rise over the next year. Comparatively, 34 percent of respondents cited the Russian invasion of Ukraine as their biggest concern. There were 8 percent of people who said they were most concerned about the COVID19 pandemic.
As a result of the rising cost of living in Germany, both high-income earners and low-income earners must cut back on their spending. “Two years of COVID19 have left their mark, but inflation and the invasion of Ukraine have made people more pessimistic than ever before,” said McKinsey expert Marcus Jacob.
As a result of rising living costs, consumers have had to cut back on spending. Two-thirds of respondents said they had spent more on groceries recently, while 61 percent said they had spent more money on transport, petrol, and energy. Consequently, consumers have reduced their spending on cosmetics, clothing, entertainment, and travel. Consumers have reduced their expenditures on cosmetics, clothing, entertainment, and travel. Particularly those industries that were already badly hit by the pandemic are now also affected by austerity, according to McKinsey expert Simon Land.
According to the survey, two-thirds of consumers have started changing their spending habits as a result of rising prices. They are switching to cheaper brands and shopping at discount stores more often. A majority of respondents also said they had become more aware of how much energy they were spending at home.