AT: Inflation still below 2% in October

Statistics Austria published its flash estimate of Austrian inflation for October today. Inflation, as measured by the Harmonised Index of Consumer Prices (HICP), was 1.8% y/y, unchanged from September's reading of 1.8%. Inflation as measured by the Consumer Price Index (CPI) also remained unchanged from September at 1,8% y/y. This means that the rate of inflation in Austria has remained below the 2% mark for the second month in a row.

According to the preliminary estimate of Statistics Austria, energy prices currently have a strong price-dampening effect, falling by -11.8% compared to the previous year. Price increases for services remain the main driver of inflation at +4.6% compared to the previous year. We expect inflation to continue its downward trend in 2024, as inflationary pressures are easing in almost all sectors. However, inflation in the services sector, supported by wage increases, should keep core inflation at a high level for a while. For 2024 as a whole, we expect HICP inflation of around 3.0% and a further marked decline in 2025.