Germany’s inflation rate may have cooled compared to the dramatic price surges of recent years, but the burden on households remains heavy.
Groceries and daily necessities, in particular, continue to rise in cost. A new survey reveals that many people in Germany are now turning to borrowed money—even for food shopping.
Borrowing for basic needs
According to a representative survey by the opinion research institute Civey, conducted for Barclays, more than half of Germans under 50 have taken out loans or borrowed money from friends and family in the past two years.
While some of this money was used for larger expenses such as cars, many respondents admitted to relying on borrowed funds for day-to-day necessities like groceries and clothing.
The survey found that 44 percent of respondents borrowed from relatives, while 40 percent relied on banks. Among everyday expenses, groceries topped the list, cited by over one in four participants.
Younger people most affected
The reliance on credit is particularly strong among younger adults. Nearly two-thirds of those aged 18 to 29 said they had borrowed money within the last two years.
For more than a third of them, it was not leisure spending but basic needs that drove them into debt.
The pattern continues among 30- to 39-year-olds, where around 32 percent borrowed specifically to cover essentials.
Most loans were relatively small: almost half of respondents reported borrowing less than €1,000, and nearly 29 percent of under-30s said they had only needed amounts up to €200.
Still, one in four participants reported borrowing between €1,001 and €5,000.
Looking ahead, almost a third expect they will need to borrow again within the next two years.
Food prices as a driver of debt
The survey highlights that food prices are the single biggest factor.
Although headline inflation stood at 2.2 percent in August, food prices alone rose by 2.5 percent compared to a year earlier.
Coffee and chocolate were particularly striking, with increases of 22.8 and 21.3 percent respectively. Fruit became more expensive, while potatoes and sugar saw significant price drops.
Even moderate price rises in everyday items are strongly felt by households, because they directly affect daily shopping.
While the sharp inflation wave of 2022 and 2023 has subsided, core inflation—excluding food and energy—remains stubbornly high at 2.7 percent.
Changing shopping behavior
The ongoing price pressure has reshaped how Germans shop. A YouGov survey for the German Press Agency showed that 57 percent of people have adjusted their grocery habits.
More than 70 percent now hunt for discounts more actively, and over one-third buy less or shop less frequently.
A large majority say they are more careful to avoid food waste, and many report eating products past their best-before date if they appear safe.
Services also more expensive
It is not only groceries that are weighing on budgets. Prices in the service sector rose by more than three percent year-on-year in July, with public transport costs jumping by 11 percent and insurance premiums by more than six percent.
Higher wage costs are cited as the main reason. Some relief came from international flights, which were around eight percent cheaper in August.
Wages rising faster than prices
There is at least one positive trend: wages are rising more quickly than consumer prices.
According to the Federal Statistical Office, wages in the second quarter increased by 4.1 percent compared to the previous year, leading to real wage growth of 1.9 percent.
This is helping offset the heavy losses in purchasing power from 2022 and 2023, although pre-pandemic levels have not yet been fully recovered.
The German Bundesbank expects the inflation rate to hover around two percent in the coming months, while the Council of Economic Experts predicts a similar average for 2025.
For many households, however, the official rate feels disconnected from reality—because it is everyday essentials like food and transport that continue to push family budgets to the limit.
