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How inflation is impacting spending and saving in Europe - A N26 study



How are Europeans dealing with the pressure of inflation? And how is inflation changing the European economy during the last period?

Thanks to the collaboration with N26, a Forbes-recognised digital bank, we are able to answer these questions. The bank’s analysts have inspected the spending and saving data of over 380,000 N26 users over the period starting from January 2022 to August of the same year. The startling spike in the inflation rate, from 5% at the end of 2021 to 10% in the last September, has peaked between February and March 2022 due to the Russian invasion: given the strong repercussion of the episode on the European economy, analysts have even decided to split (and compare) data between January-February and March-August.

As the last introductory assumption, the survey denotes that five European powers have

been in the spotlight: Austria, France, Germany, Italy and Spain.


Who saved the most? And when?

It seems that Spanish customers earn the first place in the saving ranking, retaining 6.6% of their income over the entire period taken into analysis. In Germany, the subsequent follower, this ratio reached 5.1 percentage points.

Government initiatives in these two countries might be a reason for their citizens’ saving choices and possibilities. In Spain, the government guaranteed a 20 cents discount per litre on fuel for all Spanish drivers. Electricity bills were also lower for the Iberian country: in fact, an “Exception” approved by the European Commission capped the price of gas for power production. The German government instead, operated on the public transport sector, introducing a monthly pass of only €9 valid to travel on regional trains and conveyances throughout the country.

Even though Spain experienced the most tense level of inflation, consumers’ savings relatively increased by 57.2%, skyrocketing in March (11.1%) as did most of the other countries.

The savings ratio in Austria was negative in January (-2.9%) but ended up equal to 5.8% starting from March.

In France and Italy consumers spent even more than they earned, particularly in spring and summer, showing an erratic path of saving practices. France saw an outlier month, January, in which spending exceeded saving by 4.5 percentage points. From March onwards, French savings relatively increased by a striking 140%.


The tendeciens of income

An increase in incomes between March and August touched every country of the study, with modest deviations. The major rise was registered in Austria (incomes 17.7% higher than in the two previous months) with Germany in second place (6.9% increase).



Nevertheless, Germany responded to the rise in incomes by saving less, absolutely and relatively, right before the introduction of the exceptional ticket for transports.

One of the highest relative increases in income (14.7%) has been recorded among Italian customers, where however savings encountered a large fall.


Does the genre matters?

Among the countries studied, it has emerged that men earn on average 39% more than women, who nonetheless were able to save more of their income (5.9% conversely to 3.7% for men). This trend was visible last year, too, suggesting its potential long-term path.

The similarity with 2021 data is also reflected in the month men and women saved more: March, which despite recent macroeconomic instability advocates for a fashion of yearly recurrence.

The “shoulder season”, the period between peak and off-peak times, was the worst for the cut in spending. Women saved only 3.2% of their income in May, and this month was also the most troublesome for men (who saved 0.1% of their earnings), followed by August.


Food, groceries & automotive sector

“Food & groceries” and “transport & cars” were the most inflation-affected sectors of the five European economies.

The Italian customers increased their total euros spent on food and groceries by 15.6%, the highest ratio observed. Second are Austrians and Germans, whose spike in March significantly contrasted the prior months: an 8.6% increase was in fact registered in Austria, while in Germany consumers spent 9.2% more in total euros.



Conversely, France and Spain saw a decrease in spending within this category, respectively of 8.5% for the former and a mild 1.0% for the Iberian country.


For the automobile and transport sector, the major cause of increasing spending is found in supply-chain issues particularly in Germany and Italy. This latter was the most surprising, increasing by 53.5% total euros spent in this sector from March on. Spending by German people increased on average by 39.9%, followed by a 38% rise in France.


Germans and Italians: two different lifestyle choices

When it comes to divertissement, after or during a period of tension, countries take on different responses.

For example, Germans prefer to enjoy bars and restaurants, spending more in this delight than any other country in the study. From 3.2% in the first two months of 2022, the pastime reached a solid 4.3% of German citizens’ income from March onwards. In Austria, second place of the ranking, these two ratios are very similar to the German ones.

In contrast, Spanish consumers spent only 9.3% of their income in catering, being the most responsible country from a fiscal point of view.



In Italy, on the other hand, people went out to enjoy their natural heritage, filling out beaches and tourist destinations. Italians’ travel budget increased by 5.6% of their income (€75.95 each month) between March and August, a

relative increase of 107% total euros if compared with January-February data (€36.69 monthly).

That is also the case of Spain and partly and modestly also of Germany.




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