Purchasing power decreased – Wifo-Economist: Prices continue to rise sharply

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Wifo economist Josef Baumgartner expects further sharp price increases. “The end of the road has not yet been reached,” he said in an interview with “Puls24” (video above). Stagnant inflation in the US cannot be compared with European inflation, because high energy prices would hit Europe much harder.

According to Baumgartner, at least three quarters of inflation in Austria is caused by rising energy prices. The domestic economy is currently still in a “favourable position”. In the coming months, however, he expects a “weakening in economic momentum” that will continue into next year. There is also a “downside risk”.

Electricity price brake is not enough
Purchasing power has fallen due to high prices and incomes have also fallen due to a sharp fall in real wages. According to Baumgartner, the planned brake on the electricity price is not sufficient. Similar models should also be used for “line-bound energy sources” – such as gas and heat. If done right, this would also have an “inflation dampening effect,” the economist said in the “Puls24” interview.

Source: Krone

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