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Germans investors remain nervous about inflation

Individual investors in Germany have identified inflation as their biggest concern, according to a report from Natixis Asset Managers.

Almost three-quarters (71%) of respondents in Germany told the Natixis Global Survey of Individual Investors that inflation was their biggest fear – compared with 58% of respondents globally. This comes at a time when inflation in Germany has fallen to 6.1%, according to government statistics.

“It stands to reason that Germans would be weary, especially after weathering skyrocketing energy prices in the wake of Russia’s invasion of Ukraine in 2022,” the report noted. “Fuel prices have declined 10.4% year over year, but inflation lingers. Driven largely by food prices that have increased by 16.8%, inflation still comes in at a hefty 6.3% as of April – during a period in which the country’s experienced the highest inflation in its post-war history.”

Perceived v actual inflation

Elsewhere, Allianz has produced a study that suggests perceived inflation in Germany is three times higher than the actual inflation rate. According to the insurance giant, the “felt” inflation within the country stands at 18%.

Jasmin Groeschl, senior economist at Allianz Trade, said: “There is a wide gap between perceived and actual inflation, especially in Germany. Perceived inflation in the eurozone is almost three times as high: it was recently close to 17% – about a whopping nine percentage points higher than the actual inflation rate this quarter.”

She added: “In Germany, the divergence of perceived inflation of more than 18% was as high as 11 percentage points. This is not insignificant, because perceived inflation strongly influences consumers’ actions – for example in their purchasing behaviour. So this discrepancy plays an important role – especially for the economy and businesses and for interest rate policy.”

Allianz identified several reasons for this discrepancy, writing that consumers were more attuned to price changes for frequent purchases such as food, fuel, and beverages. Groeschl added: “If the prices there rise above average, people tend to perceive a much higher inflation. But psychological aspects, demographic and regional differences, and individual consumer behaviour can also cause consumers to judge price increases differently than the official inflation measure. This creates a distorted picture and a strong discrepancy between perceived and actual inflation.”

Pete Carvill

Pete Carvill is a reporter, writer, and editor based in Berlin who has been writing for the B2B and mainstream media since 2007. He is a contributing writer for Expert Investor and, in addition, has...

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