Germans in turmoil: Trump, Ukraine war and rising inflation!

Germans in turmoil: Trump, Ukraine war and rising inflation!

Germans are growing concerned about a persistently uncertain global environment, especially after the re-election of Donald Trump. A survey by direct bank ING shows that the proportion of respondents who see US politics as the biggest geopolitical uncertainty rose from 13% to 26.7%. This is happening against the backdrop of current events dominated by conflict and economic uncertainty.

According to the results of the survey, the war in Ukraine remains the most important factor of uncertainty for German citizens, with 34.6% of the vote. These geopolitical tensions reinforce underlying concerns about the national economic situation.

Economic stress and inflation

Fears about economic development are particularly striking, and are perceived by 44% of those surveyed as the greatest burden of the current situation. Despite a decline in the inflation rate to 2.0%, almost 40% of citizens remain concerned about rising prices and general inflation.

The Consumer Price Index (CPI), which measures price trends for all goods and services that households buy in Germany, is an important indicator of inflation.

The Federal Statistical Office emphasizes the importance of the CPI both for measuring inflation and as a compensation measure for recipients of recurring payments. The annual rate of change in the CPI therefore indicates inflation in Germany and is closely monitored by consumers.

Saving behavior of consumers

In the current situation, many consumers react by “fear saving”. According to ING's survey, 51% of those concerned about the economic situation are reducing their spending. Almost a third of them say they are saving more. This change in behavior has far-reaching effects on private consumption, which, according to ING economists, is unlikely to provide any positive stimulus to economic recovery in 2025.

The CPI itself is revised regularly; the last base year changeover took place in February 2023. The index is calculated on the basis of a basket of goods that includes around 700 goods and services, with the expenditure shares based on a special weighting scheme. This methodology helps accurately reflect the inflation rate and present a clear picture of the economic situation.

In summary, the survey results show that the challenges posed by geopolitical uncertainties, economic concerns and inflation have a significant impact on Germans' everyday lives. Politicians and market observers are faced with the task of counteracting these uncertainties and improving consumer sentiment.