WIFO: Food prices will rise by 5.25 percent in 2024

According to a current forecast by the economic research institute Wifo, the increase in prices for food and beverages will halve to an average of 5.25 percent this year, but will still remain above general inflation, which is expected to be around 4 percent. Inflation will be dampened by the falling prices of agricultural goods and fuel in 2023, while wage increases will further fuel inflation.

As early as 2022, food will have become more expensive to an extent not seen in decades, Wifo writes in a current “Policy Brief”. The reasons cited for this are, on the one hand, increased costs for raw materials and energy sources as well as high prices for agricultural goods – at the same time, profits in agriculture and forestry have also increased.

In 2023, food and drinks would have become more expensive by a further 11.5 percent compared to the previous year. In contrast to general inflation, food prices in Austria rose less sharply in 2022/2023 than the average for the euro area and Germany.

High food prices are particularly problematic for households in the bottom third of the income distribution, say the Wifo economists. They would have little opportunity to switch to cheaper own brands or discount stores, as many would have already purchased this range of goods before the wave of price increases. Economic researchers warn that price regulations would not have a lasting effect on inflation and would actually worsen the situation in the medium to long term through negative incentive effects, for example on supply.

• Read here: Food industry: “We don’t deserve a golden nose”

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