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Inflation in Austria eases as energy prices fall

The Local Austria
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Inflation in Austria eases as energy prices fall
Inflation slows in the eurozone. Photo: Wance Paleri / Unsplash

Austria's inflation is finally down from the double-digits, getting to 9.1 percent in March 2023, according to official data. Which prices are dropping?

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The inflation rate for March 2023 is expected to be 9.1 percent, according to calculations by Statistik Austria as part of a flash estimate. 

"In March 2023, inflation fell well below the 10 percent mark again: After 10.9% in February, inflation in March fell to 9.1% according to a first estimate – and thus to the lowest value since June 2022", said Statistics Austria Director General Tobias Thomas. 

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According to him, the main contributors were fuel and heating oil - both energy commodities with prices that rose massively at the beginning of the Ukraine war. However, they have since dropped in price again and are now having a dampening effect on inflation year-on-year.

"The upward trend in food prices is also weakening", Thomas said.

READ ALSO: How to get Vienna’s €200 energy subsidy in 2023

However, people in Austria are still seeing high household prices, as reported, due to companies passing on higher contractual prices from the height of the crisis. In the next few months, though, gas and electricity costs are also expected to drop, according to a prediction by Austrian regulator E-Control.

Eurozone inflation is still high

As inflation across the eurozone continues to exceed the European Central Bank's (ECB) two-percent target, the bank is projected to continue raising interest rates. 

However, recent turbulence in the banking industry has emphasised the negative impact of increased borrowing expenses on the economy, and it is unclear how much the ECB will raise rates in the future.

READ ALSO: EXPLAINED: How to keep energy bills down in Austria

After the most recent rate increase of half a percentage point, some experts anticipate that the ECB will opt for a smaller increase at the next meeting in May.

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