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MONEY

EXPLAINED: The everyday products getting more expensive in Germany

Inflation is rising faster in Germany than at any point since 1993. We explain what that means for the price of certain items.

A woman takes butter off a shelf in a German supermarket.
A woman takes butter off a shelf in a German supermarket. Photo: picture alliance / dpa | Oliver Berg

Germany’s Federal Statistics Office announced last week that average inflation went up 3.1 percent in 2021 – the highest increase since 1993. And if we look at December 2021 compared to December 2020, there’s been an even sharper spike of 5.3 percent.

That’s a lot higher than the European Central Bank’s inflation target of around 2 percent, although experts say consumer prices should level out again. But what does it all mean for what you might pay at the grocery store, for your energy bills, or for new furniture and electronics?

READ ALSO: Inflation in Germany hits highest rate since 1992

A new analysis by Germany’s Federal Statistical Office (Destatis) sheds some light on how prices have changed in recent years. 

To begin with, the Destatis agency uses a hypothetical “basket” of goods based on what the average German household purchases, and compares how the prices of all those items put together change over time to come up with its figure.

That means if you don’t drive your own car, for example, you won’t experience the same inflation yourself that another household in Germany might, since Destatis includes petrol prices in its inflation calculation.

You can use the Destatis Personal Inflation Calculator yourself to see exactly how much more you can expect to pay. Below are a few general highlights from the price index.

Supermarket bills see big increases

Using 2015 as a base, certain grocery products saw particularly clear increases when individual measurements were last taken at the end of November 2021.

Butter tops the bunch with a 57.1 percent spike in price in the last six years. Whole milk, sliced cheese, and fresh bread rolls also saw increases – at 26.5 percent, 12.1 percent, and 15.2 percent respectively.

READ ALSO: Why everything is suddenly getting so expensive in Germany

A shopper holds a trolley at a Berlin supermarket.
A shopper holds a trolley at a Berlin supermarket. Photo: picture alliance/dpa | Fabian Sommer

Getting around costs more

Those who primarily or exclusively use public transport in Germany are getting hit considerably less with price increases than those who have to fill up their own vehicles regularly.

But fuel costs have hit public transport riders as well, who are paying just over 13 percent more now than they were in 2015.

Supergrade petrol has seen a 26 percent increase though, and diesel has spiked by 35 percent.

Heating and powering your home

The most volatile price fluctuations recently are in the price of heating oil. After decreasing by over 30 percent in 2020 relative to 2015 prices, it is now 47 percent more costly to heat your home in Germany now than it was six years ago. Electricity is also up about 12 percent.

READ ALSO: Households in Germany to get some relief on electricity bills

A radiator in a German home.
The cost of energy bills have skyrocketed in recent months. Photo: picture alliance/dpa/dpa-Zentralbild | Fernando Gutierrez-Juarez

Recreation and eating out

Unsurprisingly, going out for either a drink or a bite to eat has also gone up in price, but fairly uniformly across the board.

Whether getting a drink at a bar, a kebab, a Fischbrötchen or Currywurst after a late night out, or enjoying sit-down meal at a restaurant – prices for all these forms of going out have gone up by roughly the same amount – 17-19 percent – compared to 2015 rates.

Heading out to see a movie costs about 11 percent more than it did six years ago.

A person holds Fischbrötchen in Schleswig-Holstein.
A person holds Fischbrötchen in Schleswig-Holstein. Eating out costs more in Germany. Photo: picture alliance/dpa/dpa-tmn | Annette Frühauf

Electronics – where the savings are

The one notable exception to the upward trend in German consumer prices is in electronics, which are considerably more affordable now than they were in 2015.

A new mobile phone without a contract is 28 percent less expensive, while a new television set has dropped in price by a third.

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MONEY

EXPLAINED: Who will benefit from Germany’s minimum wage hike?

Germany's new €12/hour minimum wage, which came into force on October 1st, is set to benefit more than six million people. We look at exactly who is going to be helped by the €1.55/hour increase.

EXPLAINED: Who will benefit from Germany's minimum wage hike?

How much has the minimum wage risen by?
As of October 1st, the minimum wage now stands at €12 per hour, up from €10.45 previously, i.e. an increase of almost 15 percent.

How many people are going to benefit from the increase?
According to the Hans Böckler Foundation’ Institute of Economic and Social Research (WSI), a trade union-linked research foundation, there are at least 6.64 million people who were earning less than €12 per hour before the increase. This includes 3.5 million women and 2.7 million men.

Will this mainly benefit people in full- or part-time work?
If we look at the number of hours worked, we can see the following picture: 1.4 million full-time employees will get a boost to their earnings, and 1.8 million part-time staff and three million people with so-called ‘mini-jobs’ will earn more per hour. A mini-job is where you can either earn a maximum monthly sum or work for no more than three months/70 days per year. Those who only have a mini-job don’t have to pay social security contributions.

The upper earnings limit for people with mini-jobs also rose on October 1st. People can now earn a maximum of €520 per month, up from €450/month previously. 

READ ALSO: The rules in Germany around mini and midi jobs

Does the increase have anything to do with the current energy crisis?
No. The coalition government had already planned this before Russia invaded Ukraine and the resulting energy crisis. After the Bundestag (lower house of parliament) passed the draft law on June 3, 2022, it was confirmed by the Bundesrat (upper house) on June 10 where concerns about the cost-of-living crisis played a key role in the final debate. At that time, several politicians warned that spiralling energy prices and inflation were making many people’s living situations untenable. The government has since introduced other initiatives to help people cope.

READ ALSO: Wohngeld: How people in Germany can get help with rising living costs

In which sectors will the increase have the biggest impact?
More than 60 percent of people working in the hospitality sector will be affected by the increase. According to government data, 46 percent of those working in the agricultural and forestry sector were earning below €12/hour. Thirty-two percent of those in the property sector and 29 percent in the transport and warehousing sector also earned less than the minimum wage.

What are trade unions and employers’ associations saying about the hike?
The German Trade Union Confederation (DGB) has been pushing for an increase for a long time. DGB head Stefan Koerzell recently called the step “a ray of hope in these difficult times”. But the Confederation of German Employers’ Associations’ BDA called Labour and Social Affairs Minister Hubertus Heil’s draft law for the increase of the minimum wage “extremely questionable” from a political and legal perspective. The BDA’s criticism was not targeted at the increase itself, but rather the fact that it was the legislator who was deciding on wage increases instead of employers and trade unions.

What role do trade unions and employers’ associations play when it comes to the minimum wage?
Normally a big one – they sit on the minimum wage board. This committee normally proposes the incremental increases for the base hourly salary, which was introduced in 2015 – it then stood at €8.50. The new legal increase to €12 is outside of this usual mechanism, but the coalition government has promised that after this, the minimum wage commission will be responsible for future increases once again. 

READ ALSO: Everything that changes in Germany in October 2022

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