Wages in Germany have almost perfectly followed inflation during the last two and a half years. Overall price growth has only outperformed wage growth by a cumulative 4% since 2020. However, the perception of the general public would not indicate that, as the most important and politically sensitive items of the CPI basket (food and energy) have outstripped wage growth by double digits. As the latest data suggests, food prices are still 18% more expensive than before the pandemic, after adjusting them by wage growth.
