AT: Inflation at 2% in November

Statistics Austria published its flash estimate of Austrian inflation for November today. Inflation, as measured by the Harmonised Index of Consumer Prices (HICP), was 2.0% y/y, up slightly from October's reading of 1.8% y/y. Inflation as measured by the Consumer Price Index (CPI) also rose slightly compared to October, to 1.9% y/y. This means that the rate of inflation in Austria remains at or below the important target level of 2%.

According to the preliminary estimate by Statistics Austria, energy prices currently have a strong price-dampening effect, falling by -9.8% year-on-year. Service price increases remain the main driver of inflation, up +4.4% year-on-year. We expect inflation to continue its downward trend in 2024 as inflationary pressures ease in almost all sectors. However, services inflation, supported by wage increases, should keep core inflation at elevated levels for a while. We expect HICP inflation to average around 2.9 per cent in 2024 and to fall sharply again in 2025.