Financial expert analyzes: Inflation is slowing, but food remains expensive - What does that mean for consumers?

Financial expert analyzes: Inflation is slowing, but food remains expensive - What does that mean for consumers?

According to a report from www.capital.de, inflation in Germany has slowed, but many people are still worried about inflation as food prices continue to rise. In January 2024, the inflation rate was 2.9 percent, which is the lowest since June 2021. However, prices for energy products fell by 2.8 percent, while food prices continued to rise. This leads to a discrepancy between pure statistics and what people feel in everyday life.

For many people, the perceived inflation is higher than the actual inflation because they directly feel the price increases in everyday life. According to a survey by the Allensbach Institute for Demoscopy, inflation is the biggest concern for three out of four Germans. This is because consumers experience the personal impact of price increases, while geopolitical events have a more indirect impact. This perception is also influenced by psychology, as negative developments are perceived faster and more strongly than positive ones.

Expert Dominik Enste explained that the perception of inflation depends largely on certain products that play a large role in the daily diet. The large differences in the prices of staple foods are due to various shortages in the markets and can cause short-term price fluctuations.

Analysts urge caution and point out that the decline in inflation should not be overstated. The further development of service prices and the effects of wage agreements could influence the development of the inflation rate over the course of the year.

Overall, it shows that despite the decline, inflation in Germany is still a concern for many people, especially due to rising food prices. The psychological and economic factors that influence the perception of inflation should therefore be taken into account when analyzing and assessing the market situation.