Consumer price index

Wirtschaftab 13 J.

How inflation is measured: Germany's Federal Statistical Office tracks the prices of about 700 products and services. The percentage change on the previous year = the inflation rate.

The Verbraucherpreisindex (VPI, consumer price index) is the official measure of inflation in Germany.

How it is calculated:

1. The Federal Statistical Office defines a "basket of goods" of approx. 700 products and services
2. Every month the prices of these products are collected all over Germany
3. The percentage change compared with the previous year = inflation rate

What's in the basket?

• Housing (32%): rent, electricity, heating, water
• Transport (13%): petrol, car, public transport
• Food (10%): groceries, drinks
• Leisure (11%): electronics, books, holidays
• Other (34%): clothing, health, education, restaurants

Criticism of the CPI:

• Perceived inflation is often higher than the official figure (because we notice price rises in daily shopping more than in rare purchases like electronics)
• Shrinkflation and skimpflation are NOT captured
• Property prices only enter via rents, not purchase prices

Did you know? The basket of goods is updated every 5 years. In 2023, for example, oat milk and e-scooter sharing were added; VHS cassettes and phone boxes were removed. That way the index reflects actual consumer behaviour.

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