Inflation Rises Again: Prices Significantly Higher in June

The average price level last increased this significantly in May 2024. With this inflation, Austria was once again massively above the inflation in the Eurozone, which was only 2 percent. Compared to the previous month, the domestic price level increased by 0.5 percent in June. Housing and energy were the strongest price drivers.

Inflation rose again in June

However, gastronomy and food also became significantly more expensive. Statistics Austria slightly revised the annual inflation for May down from 3 to 2.9 percent.

The price level of the micro basket, which reflects daily shopping and predominantly includes food, but also daily newspapers or coffee in a café, increased by 5.6 percent in June compared to the previous year and was thus significantly above the average inflation. The price level of the mini basket, which represents a weekly shopping trip and includes food, services, and fuels, rose by only 3.2 percent.

The increase in consumer prices is mainly due to the fact that fuel prices dampened inflation less in June than recently, said the Director General of Statistics Austria, Thomas Burg, in a statement. "But also food, which for the first time since October 2024 became more expensive than average, is partly responsible for the price increase." Price increases for electricity and restaurants, "the two biggest price drivers in the annual comparison," remained almost consistently high. Without price increases for electricity, catering services, and food, inflation would be only 1.6 percent.

Housing and energy were the strongest inflation drivers

The costs for housing, water, and energy rose by an average of 5.2 percent in June, slightly more than in May (plus 5 percent). According to Statistics Austria, this area continued to drive inflation the most in the annual comparison. Rents (including new rentals) increased by 3.9 percent, following a 4.1 percent increase in May. The maintenance of apartments became 2.8 percent more expensive in June (May: plus 2.7 percent).

The prices for household energy rose by 9.6 percent, even more significantly than in May (plus 8.9 percent). According to Statistics Austria, this was mainly due to heating oil, which saw a price decrease of 9.3 percent in June, less than in May (minus 13.1 percent). Solid fuels cost 4.4 percent less in June than a year earlier, but in May the prices had still fallen by 7.8 percent.

Electricity prices rose by 35.7 percent

Electricity prices increased by 35.7 percent, almost as significantly as in May (plus 36.2 percent). Since the beginning of the year, the electricity price brake, the network cost subsidy for GIS-exempt households, and the electricity cost supplement for households with more than three people have no longer been effective in dampening prices. Network charges and the electricity tax have been increased, and the renewable energy support flat rate and the renewable energy support contribution have been reintroduced, explained Statistics Austria.

However, gas prices continued to have a dampening effect on inflation, falling by 9.1 percent in June, after minus 9 percent in May. According to the information, district heating prices remained stable at minus 0.2 percent each.

Gastronomy, hotels, and food also significantly more expensive

Prices in restaurants and hotels were raised by an average of 5.5 percent in June (May: plus 5.6 percent). Catering services became 5.6 percent more expensive (May: 5.8 percent). Inflation for accommodation services noticeably increased to 5.5 percent (May: plus 3.9 percent).

Food and non-alcoholic beverages became on average 4.7 percent more expensive this June, significantly more than in May (plus 3.5 percent). According to statisticians, this was mainly due to the price development of food, with an increase of 3.8 percent in June (May: plus 2.4 percent).

There was a price jump of 4.8 percent for meat in particular (May: plus 2.2 percent). But milk, cheese, and eggs also became noticeably more expensive with a price increase of 5.2 percent (May: plus 4 percent). Vegetables cost 2.6 percent more (May: plus 0.7 percent), fruit 5.5 percent (May: plus 4.6 percent), bread and cereal products 2.2 percent (May: plus 1.7 percent), and oils and fats 1.5 percent (May: plus 0.8 percent).

Coffee Prices Rose by Almost 27 Percent

The prices for non-alcoholic beverages increased - just like in May - by 12 percent. Coffee prices surged by 26.8 percent (May: plus 22.3 percent). In contrast, soda prices remained stable with a marginal increase of 0.1 percent, after having risen by 5.1 percent in May.

In the leisure and culture group, prices rose by an average of 4.2 percent in June (May: plus 3.7 percent). The main reason for this was the 10.5 percent more expensive package holidays, according to Statistics Austria. Airfare became 4.1 percent cheaper.

Transportation prices increased slightly by 0.3 percent in June, after having decreased by 1.0 percent in May. The decisive factor for this was the fuel prices, which fell by 5.4 percent in June, significantly less than in May (minus 9.1 percent). Additionally, the price increase for used cars intensified by 8.1 percent in June (May: plus 4.3 percent). Repairs of private vehicles cost 3.8 percent more, new cars 0.3 percent more.

Clothing Cheaper, Shoes More Expensive

Clothing became cheaper - prices fell by an average of 4.8 percent (May: minus 2.9 percent). Shoes became 1.7 percent more expensive (May: plus 2.5 percent).

According to the EU-wide harmonized consumer price index (HICP), prices in Austria increased by 3.2 percent in June, after 3 percent in May. Price increases for the maintenance of apartments, for insurance, and for package holidays - each with lower weighting shares in the HICP than in the CPI - dampened the HICP compared to the domestic consumer price index (CPI). Increases in electricity prices and accommodation services (each with larger weighting shares in the HICP than in the CPI) increased the HICP compared to the CPI.

(APA/Red)

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