Germany’s rising inflation rate is pushing a majority of German households to lose their ability to save, and use their savings on daily expenses.
According to Helmut Schleweis, president of the German Savings Banks and Giro Association (DSGV) in a Die Welt report, “up to 60 percent of German households will have to use their entire disposable income — or more — monthly for pure living expenses.”
The new figure is a huge jump from the 15% according to the Sparkasse wealth barometer in 2021.
The Association of German Volksbanken Raiffeisenbanken (BVR), a consortium of independent credit unions, is also reporting a similar trend but noted that many of their customers still have some buffer from extra savings that were set aside during the pandemic.
“The peak value of the savings rate was around 16% in 2020, for 2022 we expect a return to the pre-crisis level of 11%,” said Andreas Martin, head of the BVR.
DSGV representatives are expecting the situation to take a turn for the worse in the fall and winter, especially for households with low to medium incomes.
The country’s central bank chief Joachim Nagel recently warned that the inflation rate could go up to 10% this fall, marking the first time that the rate breached double-digits in seven decades, as the country’s economy continues to stagger from the energy crisis.
“If the energy crisis worsens, a recession seems likely next winter,” Nagel told Rheinische Post in an interview published on Saturday.
On Friday, state-controlled Russian energy giant Gazprom announced another unscheduled shutdown of the Nord Stream 1 pipeline. The pipeline will be shut down from August 31 to September 2 for “routine maintenance.”
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