Energy prices drive Saxony's inflation above the national average

For people in Saxony, life has become more expensive over the past two years than in the rest of the country. According to the Ifo Institute in Dresden, the main reason for the higher inflation rate is the sharp rise in the price of electricity, gas and district heating. The development in the other eastern German states is similar.

"It is surprising that the price development for energy in Saxony deviates from the overall German development, as these prices are usually set on national and international markets," said the Managing Director of the Dresden branch, Marcel Thum.

Inflation gap persists

In 2023, the inflation rate in Saxony was 6.5 percent - nationwide it was 5.9 percent. In 2024, it amounted to 2.9 percent (Germany: 2.2 percent). According to Ifo, the difference of around 0.7 percentage points has persisted since the beginning of 2023.

Housing costs are also exacerbating the situation

According to Ifo, rising net rents have also been contributing to the divergence in inflation rates since mid-2024. "Overall, the divergence of the two inflation rates is likely to have led to Saxon households being more heavily burdened by the additional price increases," says Robert Lehmann, research associate at the Ifo Institute.