70 percent of Austrians continue to suffer from expensive inflation!

70 percent of Austrians continue to suffer from expensive inflation!

Österreich - The effects of inflation are still noticeable for many Austrians. A current survey by the Lazarsfeld Society for OE24 shows that 70 percent of the respondents suffer from inflation. While 31 percent indicate to experience inflation noticeably, 39 percent find it very strong. The increase in one percentage point compared to the previous week illustrates the persistent problem.

The price increases in rents and package tours are particularly stressful for the citizens. According to the latest inflation numbers of the statistics Austria, the inflation rate in April was 3.1 percent. The decline in electricity price brake led to an increase in inflation from 2.0 percent in December to 3.2 percent in January. This development has strongly influenced the cost of living in the past few months.

forecasts of inflation

The Austrian National Bank (OENB) predicts an annual inflation of 2.9 percent for 2023. However, it is expected that the inflation rate will drop to 2.3 percent by 2026 and could even fall to 2.1 percent by 2027. These developments are in the context of changing inflation dynamics, which is now less of energy prices and more by core inflation, i.e. prices for industrial goods and services. These trends will probably continue in 2024 if services play an increasingly central role in the price survival.

A particularly interesting development shows the wage increases: these are increasingly overlaped to prices, which maintains inflation pressure. The difference between inflation in Austria and the rest of the euro area remains larger until 2024/25, which is due to the higher price increases in the service sectors. The main reasons for this are significantly higher wage increases in Austria and a greater level of price indexing for rents and mobile phone tariffs.

long -term insights

The publications of the OENB show that the topic of inflation is not new and has been the focus of political and economic discussion for several years. As early as 2021, various aspects of inflation, such as the effects of climate protection measures on energy prices, were analyzed. Various influencing factors such as the Covid 19 pandemic and their subsequent economic effects have also been discussed in the reports for the past few years.

The challenges in front of which Austria is facing are complex, and it remains to be seen how the inflation rate will develop. While the central bank is striving to stabilize prices, the reality of households remains characterized by steady price increases that burden the lives of many citizens. A look into the future points out that, despite a predicted decline in the inflation rate, Austria could remain in the group of countries with higher inflation rates within the euro area.

OE24 reports that 70 percent of the citizens feel inflation. The Oenb offers extensive analyzes for inflation development, while the wifo informed about forecasts until 2028. This information is crucial to understand the challenges and perspectives regarding inflation in Austria.