Consumer Prices in Austria 2021 to 2023

WIFO Research Brief by Josef Baumgartner on Development and Outlook
The peak in monthly inflation dynamics is likely to be reached at around 5 percent in January 2022 and decline to around 2 percent by the end of 2022, writes Josef Baumgartner in a recent WIFO Research Brief.

The increases in consumer prices currently observed globally are largely due to base and special effects that are a direct consequence of the COVID-19 pandemic and the global recession it triggered, as well as the (unexpectedly) rapid recovery from it.

In particular, the strong increase in energy prices (mineraloil products in 2021, natural gas and electricity in 2022) and the prices of (durable) consumer goods are driving up prices at the consumer level (CPI). Based on the current WIFO economic outlook, WIFO expects an inflation rate according to the consumer price index for 2021 of 2.8 percent realisation January to November 2021: Ø 2.6 percent, December 2021: 4.5 percent) and 2022 at 3.3 percent (first quarter of 2022: 4½ percent, fourth quarter of 2022 +2 percent).

The current WIFO outlook for wages and salaries implies that inflation in 2021 will not trigger a wage price spiral in the following year. WIFO assess that the strong price increase in 2021 and 2022 will be mainly temporary, but does not expect inflation dynamics to return to the (very) low inflation rates of the period 2010 to 2020.

WIFO Research Briefs
Finalization: December 2021
Specialist publication: WIFO Research Briefs