Due to the high inflation, Austrians fear loss of income. This is the conclusion of a study by Statistics Austria into the social consequences of the crisis. Although the assessment of the financial situation has improved recently, those surveyed expect their situation to deteriorate in the future. This also has an impact on consumption: more than half indicate that they want to spend less in the coming year on larger purchases such as travel, cars or furniture.
Since the fourth quarter of 2021, surveys have been conducted in four waves among the same people for the “How we are doing today” survey, funded by Eurostat and the Ministry of Social Affairs. For the last one in the third quarter of 2022, the responses of about 3,100 people between the ages of 16 and 69 were evaluated.
The focus was on personally experienced income loss, subjectively dealing with the cost of living and well-being and satisfaction. Loss of income does not necessarily mean an actual reduction in nominal income, but can also be a perceived loss of purchasing power due to inflation.
The mood has recently improved again
It found that the assessment of their financial situation in the past 12 months prior to the survey period in question was mostly negative, but tended to improve over time: for example, in the fourth quarter of 2021, almost 16 percent stated that their financial situation was bad. used to be. improving situation has improved in the past year. That percentage rose steadily to just over 21 percent in the third quarter of 2022.
At the end of 2021, 34 percent reported a deterioration in the past year. This share grew to 37 percent in the second quarter of 2022 and fell slightly to 36 percent in the third quarter. The share of those whose financial situation did not change fell from 50 percent (Q4 2021) to 43 percent (Q3 2022).
Long term outlook rather poor
However, in the same period, the assessment of the future situation deteriorated dramatically: for example, the share of those preparing for income loss in the coming year grew from 22 percent (Q4 2021) to 33 percent (Q3 2021). 2022). Slightly fewer people, on the other hand, expected an increase in income – at the start of the study this was still 18 percent, at the end just under 16 percent.
Fewer major purchases
This also affects consumer behavior: in the fourth quarter of 2021, almost 35 percent planned to spend less on larger purchases next year, in the third quarter of 2022 this was already 55 percent. The percentage of those planning to spend more fell from about 20 to 12 percent.
Life satisfaction, measured on a scale of zero to ten, deteriorated slightly over the study period. For example, the proportion of people with a high degree of life satisfaction (eight to ten on the scale) fell from 57 to 53 percent.
Rauch sees political success
“While many of the government’s measures come into effect at the beginning of the year, inflation remains a major challenge this year,” Social Affairs Minister Johannes Rauch (Greens) said in a broadcast. For many low-income earners, the government has been able to largely offset the effects of inflation.
“Nevertheless, many people are still very concerned. However, Rauch is convinced that “the sharp increase in small pensions, social assistance and the minimum income and the valorisation of all social benefits at the beginning of the year will have a clear effect “. .
Volkshilfe urges “safety nets”
For de Volkshilfe, the research shows that “the experience of our advice and distribution centers is also reflected in the statistics”, director Erich Fenninger said in a broadcast. He advocates the introduction of basic child safety, the valorisation of unemployment benefits and an increase in the net replacement rate, as well as “poverty-resilient social safety nets”.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
