AT: Inflation at 3.5% in January

Statistics Austria released a flash estimate of Austrian inflation for January today. Inflation, as measured by the Harmonised Index of Consumer Prices (HICP), was 3.5% y/y, up significantly from December's reading of 2.0% y/y. Inflation as measured by the Consumer Price Index (CPI) also rose sharply from December's reading to 3.3% y/y. This means that inflation in Austria would again be noticeably above the ECB's target of 2% for the eurozone average.

According to the preliminary estimate by Statistics Austria, energy prices are again having a price-driving effect, rising by +3.7% y/y. This was due to the end of the electricity price cap, the increase in network fees and the rise in the CO2 tax. Price increases for services remain the main driver of inflation, at +4.7% y/y. The momentum of energy inflation should ease in the coming months. In the services sector, too, price pressure is likely to decrease as a result of moderate wage increases over the course of the year. For 2025 as a whole, we expect HICP inflation of around 1.9% and a slight decline in 2026.