Innsbruck, Vienna (OTS) – The government’s measures to combat high inflation come too late. Although inflation will slow down, the rise in prices can no longer be reversed. The competitiveness of the economy suffers.
The federal government’s plan to steal the show with the presentation of the opposition’s rent cap at the special session of the National Council and to escape reckoning with its previous measures against high inflation may have succeeded on Wednesday. A day later, however, reality caught up with her.
Contrary to expectations, according to a quick estimate by Statistics Austria, inflation rose again from 7 percent in June to 7.5 percent in July. The fact that inflation is significantly higher in Austria than in other countries is also due to the different approaches that the countries in the EU are taking to combat it. For more than a year, many countries have been using price-cutting measures to tackle inflation head-on. It is also no coincidence that these countries have the lowest inflation rates in the euro zone. Spain, which has cut taxes on staple foods, capped the price of gas and capped the rise in all residential rents, is currently benefiting from an inflation rate of around 2 percent.
Austria, on the other hand, has taken measures to cushion the impact of high prices, thereby contributing to inflation. Subsidies were widely distributed, including to high earners. This has further fueled consumption. In addition, the dependence on gas for electricity production remains high. Now, of course, one could say that better late than never, the Austrian federal government has also switched to the path of tackling the rise in prices with the announced rent cap directly at the root. For many, however, the measures that have now been announced come too late or are not noticeable.
Rents in Austria have already risen sharply over the past year. Indicative rents have already increased by an average of 860 euros per year within a year, category rents by 620 euros. In addition, although the rental price cap will lower the inflation rate itself, it will not lead to any noticeable relief for many Tyroleans, because apartments with standard and category rents are mostly in Vienna.
Experts agree that inflation will fall noticeably in the next few months. This is not a reason for the all-clear. Wages have risen sharply along with prices. This means that the goods produced in Austria are becoming more expensive in the long term. This makes “Made in Austria” less attractive abroad and has the potential to permanently weaken the competitiveness of our economy.
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