Austrian Inflation: Increase in housing, electricity, and water costs
Austria's inflation rate has been on the rise, reaching 2.9% in March 2023, according to the latest data. This marks a slight increase from the 3.2% rate seen in both January and February of the same year. The current trend indicates a further rise, with the inflation rate predicted to reach 3.5% by July 2025, the highest since April 2024 [1][2][3][5].
The increase in Austria's inflation rate is primarily attributed to a surge in energy prices and industrial goods, as well as services. In the hospitality sector, prices rose twice as fast as the general inflation rate in March 2023, with an inflation rate of approximately 4.5% [1][4][5]. Electricity remained the main price driver for inflation in Austria during this period, surging by 36.3% [1][3].
The cost of food and non-alcoholic beverages also increased, with a 3.1% rise, while coffee became 17.7% more expensive [1]. Conversely, new cars cost 0.2% less, and cheaper fuels, airline tickets, and package holidays helped ease inflation in Austria in March 2023 [1].
In the housing sector, real estate, which is part of the services sector, saw inflation around 4.5%. Economic growth in real estate services showed modest gains in Q2 2025 (0.2%), while construction contracted (-0.5%), suggesting some cost pressures and possible inflationary effects on housing-related expenses [4]. Household energy was the main contributor to the increase in prices for housing, rent, water, and energy, with an inflation rate of 8.3% in March 2023 [1].
Rent, including new tenancies, increased by 4.1% in March 2023. However, the rent brake for regulated rental agreements did not apply in March but took effect on April 1 [1]. Prices in restaurants and hotels increased by an average of 5.8% [1].
In leisure activities, which are often included in services, inflation also aligns with the service sector inflation around 4.5% [1][3][5]. The rising prices in services reflect persistent cost pressures on leisure and other personal services [1][3].
Repairing private vehicles cost 3.7% more, and used cars cost 3.2% more [1]. In contrast, airline tickets became slightly cheaper by 2.7% [1].
Despite the rising inflation rates, the overall increase in consumer prices was relatively modest, with a 0.2% rise from February to March 2023 [1]. This slight moderation suggests a slowing down of inflation after the peak in March.
[1] Source: Statistik Austria [2] Source: European Central Bank [3] Source: Austrian National Bank [4] Source: OECD Economic Outlook [5] Source: Eurostat
- The rising inflation rate in Austria, driven by factors such as energy prices, industrial goods, and services, has led to an increase in household expenses, particularly in the areas of household energy, food, and personal services like leisure activities and repairs.
- In an attempt to mitigate the impact of inflation on personal finance, some sectors, such as new cars and airline tickets, experienced a decrease in prices, providing some relief for Austrian consumers. However, the increase in rent and other essential services remains a significant concern for household finance and business budgets.
