20 Jul 2022
Consumer price inflation reached 8.7% in June, in line with preliminary flash data, taking the country’s price growth to its strongest point in 47 years.
This is according to data published by Statistics Austria.
In May, Austria’s consumer price inflation stood at 7.7%, yet last month’s reading was the strongest on record since September 1975.
“Further price surges for fuels, food, household energy and restaurants have once again significantly driven inflation in Austria. With +8.7 %, consumer prices reached their highest inflation rate in 47 years. The last time we saw such a high inflation rate in Austria was in September 1975. The price increase was also particularly noticeable in weekly shopping: The price level of the mini basket, which includes fuel as well as food and services, rose by 18.8 % year-on-year,” stated Statistics Austria Director General, Tobias Thomas.
Transport costs in Austria rose by an annual 21.9% in June, amid a 63.2% increase in fuel prices.
In addition, utility costs rose by 10.3%, whilst food and non-alcoholic beverage prices jumped 11.3%, the Statistics Austria report goes on to add.
On a monthly basis, consumer prices in Austria rose 1.4% in June, following a 0.8% increase the month before, as forecast.
Moreover, the European Union’s harmonised index of consumer prices (HICP) edged up 8.7% last month. This followed on from a 7.7% increase in May.
The latest figures were in line with flash data.
As a result of increasing inflation, action to reduce prices of basic foodstuffs is gaining pace, as calls for national measures to offset inflation mount.
This may be achieved with a cut to VAT or a price cap, says Mayor and Governor of Vienna, Michael Ludwig. “A VAT reduction would, of course, be easier to implement, which means a scattering loss, yes. But since we know that the share of income spent on food is higher for the economically weaker, this would be a very quick and effective option,” Ludwig told Österreich on Monday.
In addition, Ludwig proposed a partial cap on electricity bills, as put forward by head of the Economic Research Institute, Gabriel Felbermayr.