Germans’ purchasing power climbs two percent

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The FINANCIAL — Germans are poised to enjoy a nominal purchasing power increase of €430 per person in the coming year. This is one of the findings of GfK’s new study, GfK Purchasing Power Germany 2016. The GfK data shows significant differences in how this purchasing power is regionally distributed.

GfK forecasts a total purchasing power of €1,776.5 bil. for Germany in 2016. Based on the current population of around 81 million inhabitants, this equates to €21,879 per person. Compared to the previous year, Germans will thus benefit from a nominal average increase of two percent or €430 per person in 2016 for consumption, rent and other living costs. A forecast by the European Commission puts the 2016 inflation rate at one percent, which means Germans can expect a real-value purchasing power increase of one percent.

Purchasing power is a measure of the population’s disposable net income, including government subsidies such as pension payments, unemployment assistance and child benefit.

Regional distribution of purchasing power

The list of Germany’s top ten urban and rural districts remains the same as last year. As in previous years, the rural district of Starnberg is Germany’s district with the highest per-capita purchasing power. With €31,850 per person, inhabitants of this district have 46 percent more than the national average.

With €17,194 per person, the rural district of Görlitz continues to be in last place among Germany’s 402 districts. The rural district of Oldenburg comes in at the national average.

The federal states in eastern Germany are slowly but surely catching up in terms of their purchasing power, but they still lag significantly behind Germany’s other federal states. Even though a comparison of index values (deviation from average) reveals both positive and negative trends, the absolute volume of per-capita purchasing power is growing in all federal states, with the most growth in Saxony (+2.8 percent) and the least in Hamburg (+1.5 percent). The per-capita purchasing power increases in 2016 range from €360 to €500, depending on the federal state in question.

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The urban districts of Munich and Erlangen are the only urban districts in the top ten list – all others are rural districts. This shows that many inhabit-ants with high purchasing power continue to live in the commuter belts outside of urban areas, despite the trend toward reurbanization.

When comparing districts, purchasing power levels in the city center areas of metropolitan regions are frequently lower than expected. This is due to the fact that many students with low income in large university cities over-balance high purchasing power inhabitants in the same areas. For example, the city state of Hamburg is Germany’s second most populated district and exceeds all other federal states in terms of per-capita purchasing power. But significant variations in purchasing power are apparent at the more granular district level. Hamburg is ranked just eighth among urban districts with more than 200,000 inhabitants, and just 52 among Germany’s urban and rural districts.

Substantial regional differences often exist side by side: Among Germany’s urban districts, the urban district of Berlin is ranked 26, with a purchasing power index of 91.4. The neighboring urban district of Potsdam falls outside the ranking of Germany’s large urban districts with 164,000 inhabitants, but has a purchasing power index of 98.6, which is around the national average. The neighboring rural district of Potsdam-Mittelmark places even higher with a purchasing power index of 100.6, which makes it the district with highest purchasing power in Germany’s eastern federal states.

 

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