AT: Inflation decreases to 2.5% in August

Statistics Austria published its flash estimate of Austrian inflation for August today. Inflation, as measured by the Harmonised Index of Consumer Prices (HICP), was 2.5% y/y, down on the July figure of 2.9% y/y. Inflation as measured by the Consumer Price Index (CPI) fell by 0.5 percentage points compared to July and stood at 2.4% y/y.

According to the preliminary estimate by Statistics Austria, this decline in inflation is mainly due to fuels, but also heating oil, which no longer drive prices up but have a noticeable price-dampening effect. We expect inflation to continue its downward trend in 2024, as inflationary pressure is easing in almost all sectors. However, inflation in the services sector, supported by wage increases, is likely to keep core inflation at a high level for a while yet. For 2024 as a whole, we expect HICP inflation of around 3.4%.