Expensive staple foods: “Correctiv”: Germany is losing a lot of purchasing power

Eat. People in Germany feel it when they visit the supermarket. Many things are significantly more expensive than they were a few years ago. According to an analysis by the research editorial team “Correctiv”, no other of the 28 countries examined in Europe has recorded such a large loss of purchasing power when it comes to basic foods. The prices for flour, milk, eggs and butter in this country have risen significantly faster than incomes since 2016. Some experts view the investigation with skepticism.

The so-called pancake index was used to illustrate this - a tool developed by “Correctiv” to make the cost of living and real purchasing power comparable in different European countries. It shows how many pancakes or pancakes a person can afford with five percent of their daily income.

In Germany the index was a good 20 pancakes in 2016, and in 2026 it will only be 16.7. This corresponds to a decline of almost 17 percent. According to “Correctiv”, this is due to the fact that ingredient prices have since increased more sharply (plus 68.4 percent) than incomes (plus 40.1 percent).

As a result, Germany falls from first to third place in the purchasing power ranking. There are big differences within Europe. According to “Correctiv”, Austria achieved the highest value with 18.3 pancakes, while North Macedonia came last with 2.8. In almost half of the countries compared, people will be able to afford fewer pancakes on five percent of their daily income in 2026 than in 2016.

Christoph Schröder from the employer-related German Economic Institute does not consider the “pancake index” to be serious. It is difficult to make general statements about purchasing power based on four foods. Prices for flour, milk, butter and eggs have risen more sharply than for food as a whole. "The reader may get the impression that purchasing power in Germany has decreased across the board. However, this is not correct," said the economist. The investigation paints “an alarmist picture” that does not correspond to reality.

The cost of living in Germany has risen sharply in recent years. According to the Federal Statistical Office, consumer prices in September this year were 26.6 percent higher than in 2020. Food prices rose by an average of 37 percent over the same period.

The losses in purchasing power in recent years have now been offset by tariff and pension increases as well as a higher minimum wage. This was the result of a study published in July by the Institute for Macroeconomics and Economic Research of the trade union-affiliated Hans Böckler Foundation.

Nevertheless, a majority of people still feel worse off than five years ago and underestimate the development of purchasing power, the researchers wrote. The result is concerns about the future development of the cost of living, consumer restraint and mistrust of the federal government.