Inflation up again – WIFO boss warns: ‘It can’t go on like this’

Finance Minister Magnus Brunner (ÖVP) has repeatedly emphasized that the European Central Bank (ECB) has the main lever for influencing inflation in Europe – and it has also curbed inflation by significantly raising key rates in the euro area.

“It is not enough to rely on the ECB”
While inflation in the Eurozone appears to have already passed its peak, it picked up again in Austria in April after a brief decline. It is precisely this distance “is worrying”, economic researcher Felbermayr said via Twitter on Tuesday. It is not enough to rely on the ECB – “an active stabilization policy is needed,” he continued.

There is currently no easing of inflation – “on the contrary”, according to the economic researcher. Felbermayr thus renewed his criticism of the federal government. A concrete example of this is housing support. This would not dampen inflation, but rather warm it up, he recently criticized that “the watering can is being used again” “rather than a much-needed drag on rents.”

Further rate hikes are imminent
At 9.8 percent, inflation in April was even well above the level in Germany (7.2 percent) and the eurozone (7.0 percent) – prices even rose by a further 0.8 percent compared to March. “Inflation in leisure, travel and services is on the rise,” Austria’s director general of statistics, Tobias Thomas, said on Tuesday. On the other hand, prices for heating oil and heating oil are again lower than a year ago.

The medium-term price target of the European Central Bank (ECB) of 2% is still clearly exceeded. Another interest rate hike is expected at the next ECB interest rate meeting on Thursday – that would further push up the cost of borrowing, which has already become much more expensive.