Austria Inflation Rate Eases to 5-Month Low

The inflation rate in Austria eased to 2.8% year-on-year in July 2026 from 3.2% in the previous month, slightly higher than preliminary estimates of a 2.7% increase. This marked the lowest reading in five months, as price growth slowed for alcoholic beverages and tobacco (1.8% vs 2.0% in June), housing utilities (2.7% vs 3.0%), transportation (6.4% vs 6.5%), education (4.9% vs 5.5%), and miscellaneous and services (3.1% vs 4.7%). Moreover, costs fell for food and non-alcoholic beverages (-0.4% vs 1.3%) and clothing and footwear (-0.7% vs 1.8%). Meanwhile, inflation strengthened for health (4.6% vs 4.4%), recreation and culture (1.9% vs 1.0%), and restaurants and hotels (4.6% vs 4.5%). On a monthly basis, consumer prices were unchanged in July, matching the pace in June. The annual harmonised inflation rate (HICP) rose by 2.7%, slowing from 3.2% in the preceding period, and slightly missing initial estimates of 2.6%.

Austria’s annual inflation rate eased to 2.7% in July 2026 from 3.2% in the previous month, preliminary estimates showed. This marked the lowest reading since February, largely driven by lower food prices. Food, alcohol, and tobacco prices fell 0.1% year-on-year, down from a 1.5% increase in June, partly reflecting the reduction in VAT on basic foodstuffs from 10% to 4.9% effective July 2026. Price growth for manufactured goods also slowed to 0.8% from 1.1%, while services remained the main driver of inflation, with prices rising 4.4%, unchanged from June. In contrast, energy price growth accelerated slightly to 5.7% from 5.4%, as fuel and heating oil prices increased more strongly in the second half of July. On a monthly basis, consumer prices declined 0.1% in July, following a flat reading in June.

The annual inflation rate in Austria slowed to 3.2% in June 2026 from a five-month high of 3.7% in the previous month, confirming preliminary estimates. This marked the lowest reading since March, as price pressures eased mainly due to a moderation in fuel and heating oil inflation, while food prices also rose at a slower pace. Despite the slowdown, transport remained the largest contributor to inflation, with prices rising 6.5%, driven by fuel prices that were still 16.3% higher than a year earlier and airfares that surged 22.4%. Housing and utilities rose 3.0%, while restaurants and accommodation services increased 4.5%. Health costs climbed 4.4%, whereas food and non-alcoholic beverages rose a modest 1.3%. On a monthly basis, consumer prices were unchanged in June after rising 0.1% in May. The annual harmonised inflation rate (HICP) was revised up to 3.2% from an initial estimate of 3.1%, while the monthly HICP was flat.