How much will be left in the wallet in 2022?

2020 and 2021 was a challenge for many people, not only in terms of health, but also financially. Rising energy prices and rising food prices have made it difficult for many households to cope. But there are many indications that next year will be better and consumers will have more money – or at least no less – in their wallets.

Purchasing power will rise significantly again in 2022, for the first time since the pandemic began, predicts Philip Voitek of market research firm GfK. He estimates that consumer purchasing power will increase by 4.3% next year.

Economist Thorsten Schmidt of the Leibniz Institute for Economic Research in Essen is not so optimistic. He estimates that real wages will remain stagnant in 2022. Nevertheless, there will be some improvements. Low-wage earners will benefit from the fact that in 2022 the minimum wage will increase from January 1st from 9.60 euros to 9.82 euros per hour. And from July 1, it will increase again by 63 cents, reaching 10.45 euros per hour. The new government has agreed to raise the minimum wage to 12 euros an hour. Exactly when it will be implemented, however, is still uncertain.

Increases in pensions as well

Apprentices can also look forward to more money. The minimum training allowance in the first year of education increases from 550 euros per month to 585 euros for 2022.

Also about 21 million retirees in Germany can expect more money from July. The question is how many more? Federal Labor Minister Hubbetus Hale said in late November that “pensions in Germany will increase by 4.4% from July 2022”. That sounds like a lot, but it’s less than what was forecast last summer: 5.2% in the western states and 5.9% in the eastern states. From January 2022 also all those who receive social assistance will receive more money and the amount will reach 449 euros per month.

Rise in prices of some goods

At the same time, however, some things will become more expensive next year. Fossil fuels will increase from 25 to 30 euros per tonne at the beginning of the year, making heating oil more expensive by 1.5 cents per liter, diesel by 1.6 cents per liter and gas by 0.1 cents more. minutes per kilowatt hour.

The evolution of crude oil prices, which is crucial as it determines the cost of fuel and heating oil for consumers, can not be predicted.

The situation with electricity, however, is different. Here the price falls from January 1 from 6.5 cents to 3.72 cents per kilowatt hour. This is the lowest level in the last ten years. However, consumers are not expected to benefit from rising energy prices.

Cigarettes are also becoming more expensive for smokers. Tobacco tax on a pack of 20 cigarettes will increase in 2022 by an average of 10 cents. Manufacturers are likely to pay higher taxes, which will be passed on to the final consumer. From July 1, e-cigarettes will also be subject to tobacco taxation.

Finally, it is comforting, however, that inflation is expected to fall to 2.6% and not to 3.2% as it was this year.

Erich Reiman

Edited by: Maria Rigoutsou

Source: Deutsche Welle