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Purchasing power
Wirtschaftab 9 J.
How much you can buy for a certain amount of money. When inflation rises, purchasing power falls – you get less for €100.
Purchasing power describes how many goods and services you get for a certain amount. If inflation is 3% and your salary stays the same, you have 3% less purchasing power in real terms.
Example: in 2020, €100 bought you about 50 scoops of ice cream. In 2026 you only get about 40 scoops for it. The €100 has stayed the same nominally but is worth less in real terms.
That's why saving in a savings book is problematic: at 0.5% interest and 2% inflation you lose 1.5% of real purchasing power every year. Investments should at least make up for inflation.
Did you know? €100 in Munich has a purchasing power of only about €82 compared with the German average. In eastern Thuringia, €100 is effectively worth €112.
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