We have been over the EU since 2010, which brings many disadvantages. Wifo expert therefore requires braking, for example with wages.
At the end of last year the high inflation of 2023 (7.8 %) seemed to be defeated, inflation fell to less than 2 %for a few months. But this year the decrease ended abruptly, prices unexpectedly rose to 3 %.
Even worse: since the years 2010 we have been constantly above the euro average. Wifo expert Josef Baumgartner analyzes why this was and which “homemade” factors keep inflation too high.
Competition flew: “We have a higher concentration of providers in some sectors than in other countries, the competition is less pronounced. There were efforts to create price comparison platforms for consumers, but politics was not really cooperative.”
Expensive services: Austria traditionally has a particularly high percentage of tourism and gastronomy at GDP and therefore in the consumer price index. “At the same time, however, the price increases were higher than the general inflation before Covid.” The rapid recovery of tourism enables companies to freely calculate their costs without losing guests. The result is “that services are currently 4.4 % more expensive”.
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High wages: This is strongly powered by the particularly high KV -increase in recent years. Then the strong inflation takes revenge, because “purchasing power was kept, but a spiral has begun”. The wages drove the costs and therefore the prices again. The following degrees must therefore actually remain under inflation – unrealistic, says Baumgartner. Moreover, we have a particularly large number of rates index (insurance, bank costs, mobile phone, etc.). And even the state itself has increased many reimbursements (recipes, documents, waste, water).
Energy: Electricity and gas became much more expensive with us than elsewhere and now slower. The electricity price brake should therefore not have been removed immediately, but only gradually.
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.
