About reported inflation rates and why you might be wrong

Hey folks,
I've stumbled across a lot of articles reporting double digit inflation rates and also a post regarding the reported inflation in Germany. This led me to the decision to share my thoughts with you and show you why your personal inflation rate might differ from these numbers.

First of all it's important to visualize the percentages the CPI in Germany gets calculated:

  • 32.5% Housing, water, electricity, gas and other fuels
  • 12.9% Transport
  • 11.3% Recreation, entertainment and culture
  • 9,7% Food and non-alcoholic beverages
  • 5.0% Furniture, lighting equipment, appliances and other household equipment
  • 4.7% Restaurant and accommodation services
  • 4.6% Health
  • 4.5% Clothing and footwear
  • 3.8% Alcoholic beverages and tobacco
  • 2.7% Communication
  • 0.8% Education [Source]

So lets say you're living with your parents still, you don't have a car and neither do you smoke nor consume alcoholic beverages, your personal inflation rate will be significantly lower than reported since you do not spend any money on housing or alcohol/tabacco.

Same applies for people whose rent increased a lot and at the same time their consumption of alcohol/tobacco is higher than the consumption of the average german citizen.

Don't get me wrong. The current inflation rate is terrible and I also believe the reported numbers were manipluated but I think it really makes sense to get a rough understanding on how high your personal inflation rate really is.

Anyway – have a nice weekend and don't forget to stack some sats.

submitted by /u/mcrech
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