02.06.2023

Austria's Anti-Inflationary Measures 2022 to 2026

WIFO Research Brief: How Targeted and Climate-friendly are They?

Compared to other European countries, Austria has implemented one of the largest packages of support measures to mitigate negative social and economic effects of high inflation and energy prices. In a recent WIFO Research Brief, Claudia Kettner, Margit Schratzenstaller and Andrea Sutrich analyse the accuracy and climate-friendliness of these measures.

The measures adopted between January 2022 and May 2023 add up to a cumulative total of 48.7 billion € for the period 2022 to 2026 (of which 48.1 billion € from the federal government). Of the 37.7 billion € relief measures focusing on private households, 14.6 billion € are short-term or temporary, while 23.1 billion € constitute permanent structural relief measures (compensation for cold progression, valorisation of certain social benefits).

For businesses and agriculture and forestry, 8.3 billion € are granted in the form of short-term measures and 2.1 billion € in the form of permanent structural measures (reduction in non-wage labour costs).

Inflation was largely driven by the rise in energy prices; accordingly, a considerable share of the relief measures (18.1 billion €, or 37.6 percent of the federal relief volume) is directly related to energy. With 93.3 percent (16.9 billion €), the lion's share of these measures has (non-intended) counterproductive effects on the climate, since incentives for energy-saving measures have been largely neglected.

With respect to the question how targeted the compensation measures are, a first very rough indicator is the distinction between income-dependent (means-tested) measures and universally granted measures. 32.8 billion € – or 87.1 percent of the relief measures for private households – are granted irrespective of income, while only 4.9 billion € depend on income.