Germans are saving despite high inflation and remain the international leader in savings rates

Germans are saving despite high inflation and remain the international leader in savings rates

According to a report from www.pnp.de, Germans continue to be world champions in saving despite high inflation. According to the Federal Statistical Office, the savings rate of Germans is 11.3 percent, which means that they save an average of 11.30 euros for every euro available. However, compared to the first half of 2020 and 2021, the savings rate fell by six percentage points. During the pandemic, many people had more money left over because, for example, vacation trips and leisure facilities were canceled.

However, high inflation is affecting consumers' desire to spend in Germany. Market research companies such as GfK and NIM expect consumer sentiment to decline by 1.4 points to 28.1 points in November. The high prices for food weaken the purchasing power of private households and dampen private consumption. Although economic expectations are improving slightly, a sustained economic recovery is not expected. Consumers' income prospects are declining due to inflation. The propensity to make larger purchases remains low. Overall, consumption levels remain subdued due to high inflation.

The specific savings rate varies greatly depending on the household. There are clear differences depending on income level, willingness to save and living situation. While some households can save a lot of money, others are left with nothing at the end of the month. This is further exacerbated by the high price increases for everyday goods.

In an international comparison, Germans save above average. The savings rate in Italy is 2.1 percent, in the USA it is 3.7 percent, in Japan it is 5.4 percent and in Austria it is 8.8 percent. Switzerland leads with a savings rate of 18.4 percent, followed by the Netherlands at 12.7 percent.

Germans' high savings rate despite high inflation could have an impact on the market. As consumption is subdued, this could lead to lower demand for goods and services. Companies could therefore face a decline in sales. The high savings rate could also have an impact on the financial sector, as banks may make fewer loans and record higher deposits.

It remains to be seen how the savings rate and consumers' desire to spend in Germany will develop in the future. Inflation developments and other economic factors will have a major influence.