Kaufkraft: Nahost-Preisschock trifft arme Haushalte und Rentner besonders

The rising costs attributed to the Middle East conflict are disproportionately affecting low-income households and pensioners in Germany, according to a study by the Munich Ifo Institute released on Monday. "We see that poorer households can cope less well with a price shock originating thousands of kilometers away and suffer greater losses in purchasing power," stated Ifo researcher Tiphaine Wibault.

Overall, consumer spending of German households is expected to increase by about 16.8 billion euros due to the crisis in the Middle East. Households in the lowest income decile lose, on average, 2.87 percent of their disposable income, while the wealthiest households only suffer a loss of 0.65 percent. Across all households, the average loss is 1.15 percent.

The lack of a European price ceiling, unlike the 2022 energy crisis, leaves the burden uncontrolled on households, particularly those with low incomes, explained Ifo expert Andreas Peichl. Older people are particularly affected: pensioner couples lose 1.53 percent and single seniors 1.45 percent of their income due to the price shock.

This is because they lack a wage income as a buffer and must spend an above-average share of their budget on heating and energy costs. The Ifo experts compare economic forecasts before and after the war start and translate the difference into purchasing power loss for individual household types. "The estimates should be understood as an upper limit, as households usually adjust their consumption behavior in the face of strong price increases," the study explained.

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