During the first lockdown due to the coronavirus pandemic, considerably more households in Germany expected the rate of inflation to rise than had one year before. Likewise, the proportion of households expecting falling prices was also significantly higher than in the previous year. Since that time, inflation expectations have stabilised again somewhat.
Despite the coronavirus crisis, more than two-thirds of all respondents expect real estate prices to rise over the next 12 months. This means that, following a drop in prices in spring 2020 as a result of the coronavirus pandemic, most respondents again expect real estate prices to develop in line with their expectations from spring 2019.
The coronavirus crisis also had an impact on expected income growth. In spring 2020, households expected on average that their mean monthly net income would decline. Since June 2020, however, this assessment has brightened slightly.
The Deutsche Bundesbank conducts regular surveys of households’ expectations for unemployment, economic growth, rent prices, real estate prices, and interest rates on savings and loans. These data are used to calculate index figures, from which corresponding trends can be easily derived.
What is inflation? How is it measured? What role is played by inflation expectations? Why is the Deutsche Bundesbank interested in changes in uncertainty regarding inflation? The text and video featured on the following pages provide more information on these and similar questions.