Two-thirds of Germans will soon have no ability to save money, and the situation is likely to worsen due to soaring inflation, said Helmut Schleweis, who serves as both the president of Sparkasse and the German Savings Banks Association.
The influential banking head says he fears a bad winter for Germans, with most citizens increasingly reaching their financial limits due to high inflation.
“We expect that because of the significant price increase, up to 60 percent of German households will have to use their entire monthly disposable income — or more — for pure living expenses,” said Helmut Schleweis to the Welt am Sonntag weekly. According to the Sparkasse wealth barometer, only 15 percent could not put money aside a year ago, representing a massive change in Germany’s economic situation.
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A number of politicians are increasingly calling on Germans to accept a reduced standard of living to support sanctions and deal with inflation. Wealthy Green Party Prime Minister of Baden-Württemberg Winfried Kretschmann has called on Germans to forego taking frequent showers and use washcloths instead, while another wealthy politician, Marie-Agnes Strack-Zimmermann, said this week that Germans would have to make “personal sacrifices” in the war against Russia.
However, other banking heads are warning that Germans are increasingly financially tapped out, especially as soaring energy prices are only expected to go higher. Electricity prices have nearly quadrupled and gas seems to hit a new record nearly every week. Volksbank and Raiffeisenbank have also observed that customers have less room to maneuver, according to the T-online news outlet.
“The high inflation robs consumers of purchasing power, which reduces their ability to save,” said Andreas Martin from the board of directors of the Association of German Volksbank and Raiffeisenbank.
On Saturday, Bundesbank boss Joachim Nagel said that he thought the inflation rate could rise to 10 percent once the fuel discount and the 9-euro ticket ended. Nagel is not giving the all-clear sign for the coming year either.
“The inflation issue will not go away in 2023,” he told the Rheinische Post. Russia has drastically reduced its gas supplies, and natural gas and electricity prices have risen more than expected. The inflation rate for the whole of 2022 should be 8 percent, according to European calculations, and Nagel expects a rate of 6 percent for the coming year.