Inflation in Austria Rises Again, to 3.7% in May

On the industrial goods front, the statistics also show a notable rebound. Prices increased by 1.4% year-on-year in May, after a more moderate rise of 0.8% the previous month. This movement reflects a return of tensions on manufactured goods, in a context where energy costs and company margins continue to influence production prices.

Conversely, the food sector showed a slight easing of inflationary pressure. Prices for food, tobacco, and alcohol increased by 2.4% year-on-year in May, compared to 2.6% in April. This deceleration, although modest, is one of the few signs of relief in the consumer basket, even though households remain exposed to price increases well above the European Central Bank's price stability target.

Core Inflation and Sectoral Developments

Core inflation, which excludes the most volatile prices such as energy and unprocessed food, stood at 3.3% in May. This figure, lower than the overall inflation rate, indicates that the underlying component of price increases remains deeply embedded in the Austrian economy and is not solely due to one-off or sectoral factors.

On the energy front, developments were mixed. Gasoline prices slightly increased in May compared to the previous month, while diesel and heating oil prices declined. This sectoral divergence limited the contribution of energy to the overall rise in inflation, without reversing the general trend.

Detailed Publication Expected on June 17

The flash estimate figures remain provisional, however. The definitive index for May, accompanied by a detailed analysis by product category and expenditure item, will be published on June 17, 2025, by Statistik Austria. This comprehensive report will clarify the extent of the rise in services and assess the short-term inflation outlook for the Austrian economy.

The general economic context is also marked by cautious household consumption. Several observers note that Austrian consumers continue to postpone or forgo certain purchases due to persistent inflation, a trend described in the economic press by the phrase "Kunden überlegen dreimal, wofür sie ihr Geld ausgeben." The acceleration of prices in May could reinforce this attitude, as the European Central Bank (ECB) continues its restrictive monetary policy to bring inflation in the euro area back towards its 2% target.

In summary, the new flash estimate confirms that Austrian inflation remains far from the price stability target, with a rate of 3.7% in May, fueled primarily by services and, to a lesser extent, by industrial goods. The deceleration of food prices was not enough to offset these pressures, and vigilance remains necessary before the publication of the definitive figures scheduled for June 17.