Inflation in Austria is still above the target of 2 percent. Many people are crushed by rising costs and can afford to live less and less. The “Krone” looked at the five biggest problem areas and how they could be solved.
For much of the past few years, Austria has been one of the frontrunners when it comes to inflation. Even in August, only two Western European countries were ahead of us. Inflation rates are currently falling across Europe. However, this does not make goods and services cheaper; it only slows down price increases. The fact is that the price level remains high. This remains a challenge for many Austrians.
Energy
Many households have been faced with high energy bills over the past two years, as the war in Ukraine caused the cost of electricity and gas to skyrocket. Although they have fallen again, the cost is still 60 percent higher than in 2019 – i.e. before the pandemic – according to the energy price index.
The government responded by introducing a ceiling on electricity prices, but this does not compensate for the high heating costs and does not help pay for the prices of goods that have become more expensive as a result of the increase in energy prices. The next government will not only be able to count on further relaxations on the energy markets. Instead, dependencies must be reduced and renewable energy sources must be expanded rapidly.
Living
Housing is a basic need and is becoming increasingly expensive. Whether renting or owning: prices have risen. People with low incomes in particular suffer from the rapidly rising costs. The price hammer hits the private housing market the hardest: the average rent is more than 10 euros per square meter! But across all apartments, you pay 650 euros per month rent for an average apartment. According to the study, 80 percent see the costs of their own four walls as a burden, and one in five even feels heavily burdened by the rent.
However, people are even being forced into the rental market, as owning a home is currently much further away for many people. Although around two-thirds want to live in their own home, this often remains a dream due to stricter credit rules and tight household budgets. A strategy for creating new homes could help, as could more social housing and support for people on low incomes. The SPÖ, meanwhile, is promoting a rent cap and help for people who want to finance their own home.
Groceries
A glance at the supermarket shelves shows that food is increasingly becoming a burden: from milk and bread to vegetables and meat: Austrians are paying an average of 20 percent more for their weekly groceries this year than they did two years ago. The price increases are particularly high for cheap food: according to AK, you pay as much as 43 percent more for it than in 2021. The announced price database for food remained a promise from the government. The government could not bring itself to intervene in prices or reduce VAT either. But this would only be a symptom treatment. In order to ensure that more affordable food ends up on the shelves, agriculture needs fair framework conditions. In addition, prices on the world markets must fall again and the high costs for producers must decrease.
gastronomy
But not only in the supermarket, also in the hospitality industry the Austrians have to dig deeper into their pockets. Whether it is a Krugerl beer, a cappuccino or a schnitzel: going out has become a luxury for many people. At the moment, the gastronomy and tourism in particular are driving up the price increases. Recently, inflation was twice as high as the general inflation. A relief for the hospitality industry would be a reduction in the burden on the labor factor. After all, wages make up a large part of the costs in cafes, pubs and hotels.
Car traffic
Petrol, diesel, electric cars – everything became more expensive everywhere. Many people are dependent on their car: for two-thirds of Austrians, their car is indispensable in everyday life. The fact that fuel prices are falling again is only a limited reason to breathe a sigh of relief, because the increases in recent years have been above average, also in all areas related to cars. While the general price level rose by 22 percent compared to April 2021, the costs for operating and maintaining a car increased by 26 percent. In concrete terms, a tyre service became 39 percent more expensive, an hour at a car repair shop by around 28 percent and an oil service by around 25 percent. The next cabinet will have to find a healthy middle ground between more greening and affordable mobility. Otherwise, the acceptance of climate measures will be lost…
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.
