The Austrian National Bank (ONB) on Wednesday revised up its inflation forecast for 2023 as domestic price pressures eclipse woes caused by a now-easing energy crunch. Inflation is expected to come in at 6.9% in 2023, the ONB said, compared to the central bank's previous forecast of 6.5%. Inflation is expected to slow to 4.0% in 2024 and 3.1% in 2025, according to its forecasts for harmonised consumer price indices. This compared with previous forecasts for 3.6% and 2.9%, respectively. "In 2023, inflationary pressure from energy prices is easing significantly," the ONB said in a statement. "However, the inflation rate is increasingly determined by domestic price pressure, which also stems from the strong wage cost increases of the recent past," it added. As a result, core inflation, which excludes energy and food, is expected to increase by one percentage point to 6.1% in 2023 before easing again in 2024.
Harmonised inflation in Austria was above that of its
euro zone neighbours at the start of the year, coming in at 11%
in February.
(Reporting by Tristan Veyet and Rachel More, Editing by
Friederike Heine)
