Inflation Development in Bavaria in May 2023
In May 2023, inflation in Bavaria remained unchanged at 2.1 percent, which is considered quite low in the medium-term comparison. In recent years, the inflation rate has been significantly higher at times, and only last September, a slight decrease to 1.9 percent was recorded.
Key Drivers of Inflation
- Food: Prices rose by an average of 3.7 percent year-on-year. Fresh fruits (+9.2%), butter (+18.5%), and chocolate (+24.2%) saw particularly strong increases. In contrast, olive oil and sugar became about a quarter cheaper.
- Energy: Energy prices fell by 5.1 percent, with significant declines in heating oil and fuels.
Impact on Consumers
The grilling season brought mixed price developments for grilling products:
- Bratwurst: +0.5%
- Grill sauces, soy sauce, salad dressings: +2.4%
- White bread: +5.1%
- Head and iceberg lettuce: -5.4%
- Ketchup: -4.5%
Importance for Savers and Investors
An inflation rate of 2.1 percent means a moderate decrease in purchasing power. Savers risk a real loss of value in their savings if the interest rate on their investments is below this inflation rate. Investors should consider that rising food prices can increase consumer spending while falling energy prices dampen overall cost burdens.
The stable inflation of around two percent signals a calm price development, creating a degree of predictability for economic decisions.