Real incomes of German residents showed a record drop

Real incomes in Germany fell by 4.1% in 2022, the biggest drop since the count began in 2008, according to the German Federal Statistical Office (Destatis). At the same time, over the past year, the service recorded the strongest growth in the average nominal salary since that moment – by 3.4% year-on-year. Destatis points out that the increase could not compensate for record inflation for Germany. The increase in prices in annual terms in December amounted to 8.6%. Destatis estimated the average value for 2022 at 7.9%.

As follows from the preliminary data of the statistical service, the largest growth in nominal terms was in such sectors as aviation (by 17.6% in Q3), underground construction (by 15.4%), construction of high-rise buildings (by 13.1%) , legal and tax consultations, audit (by 10.1%). The statistical office of Germany calculates the indicator in relation to the first quarter.

The reduction in nominal wages, on the other hand, was noted in the processing of coal and oil (by 4.6% in the III quarter), the production of clothing (minus 7.4%), education (by 4.1%) and public administration, defense and social security (by 3.3%).

In January 2022, annual inflation in Germany was 4.9%, in February it showed a slight increase to 5.1%. After that, against the background of the beginning of the military conflict in Ukraine and the adoption of anti-Russian sanctions, inflation accelerated sharply to 7.3% in March. After reaching 7.9% in May, it slowed down to 7.6% in June and 7.5% in July. But already in the fall, it resumed record growth rates and reached 10% in September and 10.4% in October amid fears of a cold winter and, as a result, a surge in energy prices. Thanks to a warm winter, inflation began to slow down and amounted to 10% per annum in November and 8.6% in December.

Last November, the Organization for Economic Co-operation and Development (OECD) reported an increase in the average cost of labor among members of the association from the eurozone countries by 4% in the third quarter of 2022 compared to the same period in 2021. Real incomes of the population decreased by an average of 0 .13%, according to the OECD report.

The sharpest decline was observed in the Czech Republic (8.94%), Slovenia (8.57%), Estonia (8.03%) and Lithuania (7.49%), Vedomosti wrote. The only European country where the growth of real incomes of the population was observed was Hungary – there it amounted to 2.54% in the III quarter.

According to Eurostat data, inflation in the Eurozone in January 2023 amounted to 8.5% per annum, which was the third decrease in a row: in November it was 10.1%, in December – 9.2%.

The service continues to observe the largest increase in prices in the Baltic countries: Latvia (21.6%), Estonia (18.8%) and Lithuania (18.4%). Also, high inflation rates remain in Slovakia (14.9%), Croatia (12.5%), Austria (11.5%) and Italy (10.9%). Eurostat recorded the lowest inflation rates in Spain and Luxembourg (both countries 5.8%), followed by Malta (6.7%), Cyprus (6.8%), France (7%) and Greece (7.2%). %). Data for Germany is not yet included in the service’s calculations.

According to OECD estimates, the decline in real income in Germany in the third quarter of 2022 was 4.35%.