Read news from:
Austria
SHARE
COPY LINK
For members

COST OF LIVING

Why (and when) double-digit inflation is set to hit Austria

Financial experts in Austria do not expect inflation to slow down any time soon. In fact, they are predicting the opposite. Here's what you need to know.

Published: 16 August 2022 14:09 CEST
Why (and when) double-digit inflation is set to hit Austria
Even cheap groceries, cleaning supplies and beauty products are now being hit by inflation in Austria. (Photo by Markus Spiske / Pexels)

In a recent interview, inflation expert Josef Baumgartner forecast that inflation in Austria will hit double-digits in the coming months.

Baumgartner, from the Austrian Institute of Economic Research (WIFO), told Kurier that residents in Austria should prepare themselves for an ongoing increase in inflation due to rising energy prices.

Baumgartner said: “We’re a long way from the all-clear. According to the announcements by Wien Energie and EVN, I expect an inflation rate of more than ten percent by September, and no later than April 2023.”

FOR MEMBERS: EXPLAINED: What is Austria’s ‘Tax Freedom Day’?

The latest estimate by Statistics Austria shows inflation was already at 9.2 percent in July, as reported by The Local.

This is in stark contrast to predictions made by the European Central Bank earlier this year when it was expected that inflation would fall in the second half of 2022.

How expensive could energy in Austria become?

WIFO expert Baumgartner based his forecast for Austria on wholesale electricity prices, which are currently 247 percent higher than in August 2021, reports ORF. 

Baumgartner said: “If the energy suppliers pass this on one-to-one, there is a risk of an enormous price increase.”

Additionally, Baumgartner expects prices for electricity and gas to go up by a further 50 percent in September, and was not optimistic that the planned nationwide electricity price cap will be enough to dampen energy prices.

READ MORE: Cost of living: How to save money on energy bills in Austria

He added that federal government intervention must go further to tackle gas and district heating prices.

On August 3rd, EVN and Wien Energie – both part of the Energieallianz Austria (EAA) group – announced they will be increasing energy prices from September.

EVN (which is mostly state-owned) blamed the move on price increases on the international wholesale markets.

According to ORF, Baumgartner believes these planned price increases will further impact the customer price index and push up inflation across Austria, even if the tariff changes only apply to customers in the east of the country.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

COST OF LIVING

How to make sure you get Austria’s Klimabonus payout early this year

There are two ways of receiving Austria's Klimabonus payout: via wire transfer or by post and one of them is much faster than the other.

Published: 2 April 2024 11:15 CEST
How to make sure you get Austria's Klimabonus payout early this year

The Klimabonus (climate bonus) is a part of Austria’s eco-social tax reform, a set of measures to promote climate protection. One such action includes a tax on CO2 emissions, increasing fuel prices and affecting Austrian drivers. The annual Klimabonus aims to offset this expense. 

The concept is that individuals who rely more on public transportation and choose eco-friendly transportation options will have a more significant portion of the bonus remaining at the end of the month.

CO2 tax rising

Last year, Austrian residents received between €110 and €220 via the Klimabonus. The amount depended on the person’s primary residence and the local infrastructure. As explained above, those living in cities with more extensive public transport networks would receive less money, as they had more opportunities to make climate-conscious decisions. 

Now, the federal government said it would determine the amount “in early summer”, though Chancellor Karl Nehammer had already confirmed to Austrian media that the payout would take place for the third time in 2024. 

READ ALSO: What you can do if you still haven’t received Austria’s 2023 Klimabonus

Since the Klimabonus is linked to the CO2 taxes, which have seen a 38 percent increase, there have been calls for the payout to rise accordingly. That would make the payment between €150 and €300. 

Update your bank information

The Klimabonus is paid automatically to all eligible people. If your bank details are up to date with FinanzOnline, they will be wired directly to your account, making the process much easier and faster.

Those whose bank accounts are not stated on the government website still receive the payout as a voucher sent via secure letter. This means you must be at home to sign for it. You will then have to exchange the voucher for cash and, in some cases, might have to wait even weeks to receive the letter—after the government makes the wires.

All you need to do is have your bank details on FinanzOnline to receive your payout sooner. 

Once logged in to the website, you can change your personal information, including bank data, as a private person by clicking the “persönlichen Daten” link on the homepage. You can find that under “Weitere Services – Anträge – Grunddaten”, it is registered as a freelancer or company.

It’s worth pointing out that even though you need an IBAN, your bank account does not necessarily need to be an Austrian account. You can receive the payment straight in your SEPA bank account – including online banks such as N26 and Wise. 

SHOW COMMENTS