How Consumers have Managed the Multicrisis: Evidence across Demographics as well as Income and Spending Profiles in Germany

Oliver Falck, Alice Fleischmann, Daniel Lappas, Emanuel Renkl and Sebastian Wichert

in ifo Forschungsberichte from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: The present report offers new insights into how the recent multi-crisis - comprising the war in Ukraine, high inflation, and the general economic downturn - has affected private consumers in Germany based on anonymized, fine-grained banking transaction data from N26. The analysis covers trends in income, spending, and overdraft usage from January 2021 to December 2024, a period of pronounced economic uncertainty. It examines developments across demographic dimensions (gender, age, region, salary) and financially vulnerable segments (high spending-to-income ratios, rent burdens). Overall, consumers navigated the multi-crisis period with notable resilience, supported by strong nominal salary growth. However, liquidity constraints were widespread until 2023, as rising spending initially outpaced income, leading to elevated overdraft usage. Spending pressures shifted from variable to fixed costs, particularly housing. Although overdraft usage is declining and purchasing power is stabilizing, overall spending remains high, and financial flexibility is still limited, especially for older consumers (ages 50–60) and those with high rent burdens or elevated spending levels. Private consumption is therefore unlikely to serve as a strong growth driver in the near term, as many households remain cautious amid persistent fixed costs and broader economic uncertainty, including limited growth prospects in Germany and ongoing geopolitical risks. Overall the findings highlight the importance of addressing housing affordability - particularly for lower-income groups - and of supporting consumers in building up liquidity buffers and ensuring access to affordable credit to smooth consumption during future financial strains.

Date: 2025
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