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Most expect inflation to wipe out any income increase

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Most expect inflation to wipe out any income increase
Photo: DPA
10:27 CET+01:00
Despite the economic revival, only 6 percent of the German population expect to have more money in their pockets this year than last according to a survey.

More than 1,000 people were asked about their financial situation and how they thought it might develop during the year in the survey conducted by pollster firm GfK for the Welt am Sonntag newspaper.

The question of whether they thought they would have more left over after paying taxes and social contributions was answered with a 'no' by 70 percent, while a further 14 percent said although they expected to have more, they figured any increase would be wiped out by increased prices. This left just 5.9 percent who thought they would have more money at the end of each month.

Expectations varied strongly according to where people lived, the pollsters reported. The most pessimistic people were in the north with just 6.7 percent of people in Schleswig-Holstein expecting to have more money. Yet in Baden-Württemberg 12.7 percent were expecting to have fuller pockets in 2011.

“If you take into account that the predicted income increase is around three percent, that inflation is just under 2 percent and we asked about the expected noticeable increase in income, I see the results as positive,” said Klaus Hilbinger from GfK.

There is widespread concern across Europe that inflation could rise over the coming years, with Thomas Mayer, chief economist at Deutsche Bank saying last week he could easily imagine inflation rising to 4 percent in the next two or three years.

DAPD/hc

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