Inflation in Austria falls to 2.8 percent in July

The reduction of the electricity tax and the renewable energy surcharge has been in force since January 2026 and noticeably relieves households. In addition, a social tariff for electricity has been available since April 2026 and is intended to benefit lower-income households. Both measures have a price-dampening effect, according to Statistik Austria.

Gastronomy and food remain price drivers

However, other sectors continue to drive prices upward. Services in gastronomy and accommodation became more expensive than average, as did food. These items partially offset the dampening effect of energy prices, which is why the overall rate of price increases fell less sharply than the decline in electricity prices alone would suggest.

Lenk spoke in this context of a mixed picture: While energy is pulling the inflation rate clearly downward, wage-sensitive services in particular continue to create price pressure. Food prices also remained a key factor, which Statistik Austria names as one of the main price drivers of recent months.

Core inflation still at an elevated level

Core inflation, i.e., the rate of price increases excluding the highly volatile energy and food prices, also developed downward according to Statistik Austria, albeit at a higher level than the overall inflation rate. This indicates that the underlying price momentum has not yet been fully broken, but is weakening.

For the European Central Bank, the development in Austria is another signal that the inflation wave is losing further momentum. The Austrian Trade Union Federation (ÖGB) also assessed the figures as fundamentally positive, but at the same time called for further relief in food and services so that the decline actually reaches households.

Outlook for the coming months

Consumers in Austria have been able to benefit from lower electricity bills since January 2026. The social tariff from April 2026 complements this relief. Nevertheless, economic researchers advise observing the further development closely, particularly with regard to food and services, as these items make up a large share of monthly expenses.

Overall, the July data set shows: Inflation in Austria is cooling, and the direction is right. Whether the trend continues depends, according to Statistik Austria, above all on how energy prices, wage settlements, and prices in gastronomy, accommodation, and food develop in the coming months.