According to a quick estimate by Statistics Austria, the inflation rate in Austria in March was 6.8 percent, the highest since November 1981. “Recent increases in fuel and energy prices further fueled inflation,” said Tobias Thomas, Director General of Statistics Austria yesterday.
“That’s a little more than we expected,” says Wifo economist Josef Baumgartner in an interview with the OÖ Nachrichten. However, he assumes that we have not yet reached the highest level. “I expect that for May at around 7.5 percent.”
It is currently difficult to predict whether there will be a relaxation afterwards. “That depends on whether oil and gas from Russia continue to flow,” says Baumgartner. Should deliveries come to a halt, “then we’ll quickly be in double digits for inflation”.
The inflation rates are already in the double digits in the euro countries Estonia with 14.8 percent and the Netherlands with 11.9 percent. According to Eurostat, the inflation rate in the euro zone as a whole is 7.5 percent. With 7.6 percent inflation, Germany is also well above the level of Austria. Baumgartner attributes the fact that the currency devaluation was lower here than the euro area average to the relief provided by the government, above all to the suspension of the green electricity tax.
reminder from the Bundesbank
The significant increase in the inflation rate in Germany prompted the President of the Deutsche Bundesbank, Joachim Nagel, to appeal to the ECB. He warns against further delaying the change in monetary policy. “The inflation data speak a clear language. Monetary policy must not miss the opportunity to take countermeasures in good time.” “Now it is important that the ECB finally takes its foot off the gas. Otherwise, inflation expectations will continue to rise and high inflation will become permanent,” said Jörg Kramer, chief economist at Germany’s Commerzbank.
Wifo economist Baumgartner also expects that inflation, which is currently mainly due to the sharp rise in energy prices, will spread to other sectors of the economy. From today’s perspective, an inflation rate of around six percent is expected for 2022 as a whole.
The inflation rate is likely to be around 3.5 percent next year. For 2024, “there should be a two before the comma again,” says Baumgartner. The prerequisite for this is that oil and gas from Russia continue to flow. (hn)
Source: Nachrichten
