Inflation in Austria Remains High in October

The biggest price drivers were again energy and gastronomy. The costs for housing, water, and energy rose by 6.6 percent, while restaurants and hotels became 6.0 percent more expensive. Household energy prices alone increased by 15.7 percent.

Electricity Costs Cause Inflation in Austria to Rise Sharply

In particular, the sharply increased electricity costs (plus 40.7 percent) led to a rise in energy prices. According to statistics, this is due to the expiration of government support at the beginning of the year, such as the electricity price brake, as well as the increase in network charges and electricity tax. Additionally, the subsidies and the flat rate for green electricity were reintroduced. In October, however, mobile telephony (minus 12.6 percent), e-bikes (minus 16.8 percent), and butter (minus 14.1 percent) had a price-reducing effect.

Gas Prices No Longer Have a Price-Dampening Effect

For the first time since March 2024, gas prices no longer had a price-dampening effect, with an increase of 3.5 percent in October compared to the previous year. The reason is a base effect, according to Statistics Austria. A base effect occurs when the percentage change of a figure is distorted due to an unusually high or low comparison base. Solid fuels (plus 0.2 percent) also did not dampen inflation for the first time since July 2023 in October, and district heating became 1.7 percent more expensive. In contrast, heating oil prices fell by 1.9 percent.

Services in the area of restaurants and hotels became 6 percent more expensive, catering services 6.2 percent. Accommodation services also increased by 5.2 percent. However, compared to September inflation, the price pressure in this category has slightly decreased, according to the statistics. Food and non-alcoholic beverages became 4.0 percent more expensive. In transportation, the increase was 2.5 percent. Package holidays became 6.1 percent more expensive.

Inflation Compared to September at 0.4 Percent

Compared to the previous month of September, inflation increased by 0.4 percent. In the month-to-month comparison, clothing items (up 4.2 percent) primarily drove inflation upwards. This is attributed to the seasonal transition between autumn and winter goods. Inflation was dampened, however, by price declines in package holidays, which became 4.8 percent cheaper.

Inflation in Austria Clearly Above Eurozone Inflation

The Harmonized Consumer Price Index (HCPI) also rose by 4.0 percent in October compared to the same month last year. Inflation in Austria remains significantly above the Eurozone average in October. In the Eurozone, inflation even slightly decreased in the previous month - to 2.1 percent. In September, the inflation rate had risen to 2.2 percent.

The gap with other countries drew criticism from the FPÖ. The black-red-pink government has been failing for months in combating inflation. The population must prepare for further losses in purchasing power. Against the backdrop of inflation, the opposition party is also annoyed by the still pending presentation of the industrial strategy. "The location Austria remains uncertain, unattractive, and increasingly uninteresting for investments," said FPÖ economic spokesperson Barbara Kolm according to a press release.

The ÖGB renewed its demand for an anti-inflation commission and a public price database in light of the inflation figures. Finance State Secretary Barbara Eibinger-Miedl (ÖVP) used the high inflation rates for energy to advocate for a swift resolution of the Electricity Market Act in the National Council.

(APA/Red)

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