Sharp Rise in Energy Prices

WIFO Research Brief on Options for Relieving the Burden on Households and Businesses
Energy prices have already risen significantly in 2021 in the course of the economic recovery after the COVID-19 induced economic slump. In view of the war in Ukraine, further measures to relieve the burden on consumers and businesses beyond those already decided in recent weeks are becoming more urgent.

Based on a preliminary analysis of 10 March 2022, a WIFO Research Brief by Josef Baumgartner, Gabriel Felbermayr, Claudia Kettner-Marx, Angela Köppl, Daniela Kletzan-Slamanig, Simon Loretz and Margit Schratzenstaller has now been published.

As in many other countries, a number of relief options are currently being discussed in Austria. Two measures have been called for particularly intensively in the recent public debate: the postponement of the introduction of a CO2 price planned for July 2022 and the reduction of the VAT rate for energy. However, these two options turn out to be less suitable for several reasons. Much more suitable are more targeted and accurate measures to cushion the loss of purchasing power.