The inflation perceived by consumers and the officially recorded rate differ particularly strongly in Germany.
The perceived inflation rate in May was 18 percent, almost three times as high as that actually determined (6.1 percent), said the credit insurer Allianz Trade on Monday in Hamburg. “This is not insignificant, because the perceived inflation has a strong influence on the actions of consumers, for example in purchasing behavior,” said Jasmin Gröschl, Senior Economist at Allianz Trade. This discrepancy therefore plays an important role for the economy and companies as well as for interest rate policy.
There are various reasons why perceived inflation differs from official inflation. For example, consumers paid more attention to price changes for frequent purchases such as food and beverages, fuel or other errands in the supermarket. “If these prices rise above average there, people tend to feel that inflation is much higher.” But psychological aspects, demographic and regional differences and individual consumer behavior could also lead to consumers assessing the price increase differently than the official measurement. “This creates a distorted picture and a strong discrepancy between perceived and actual inflation.”
Inflation in the non-EU country Switzerland is exceptionally low at 2.2 percent in May. Among other things, it benefits from the strong Swiss franc, which dampens inflation through import prices. (dpa)