New figures: Inflation continues to rise in May

The Inflation in Austria increased again in May. According to a quick estimate by the Austrian Statistics The inflation rate was 3.7 percent, after 3.4 percent in April. Compared to the previous month, the general price level rose by 0.1 percent.

• At Energy However, inflationary pressure was somewhat lower. While gasoline rose moderately in price, prices for diesel and heating oil fell compared to April.
• The prices for Food, tobacco and alcohol rose by 2.4 percent year-on-year, less than the 2.6 percent in April. The so-called core inflation was 3.3 percent in May.

Further details, including the index level for the reporting month, are scheduled to be published on June 17.

Kocher: The increases are mainly due to the Iran war

For National Bank Governor Martin Kocher, the rise in overall inflation came as expected in May. He referred to developments in the Middle East. The uncertainty all around important transport and trade routes affect the energy and raw materials markets and are reflected in further price developments. “Overall, the situation is not comparable to 2022, where inflation was much higher in May due to stronger demand and other factors, but is still challenging,” emphasized Kocher in a written statement. As a small, open economy, Austria is particularly affected by international developments.

Inflation in the euro area is expected to fall back to 2 percent

The Governing Council will carefully assess the new data at its meeting next week. “Our mission is clear: We will ensure price stability in the medium term and reduce inflation in the euro area to 2 percent,” explained Kocher. According to the head of the central bank, if geopolitical tensions continue and global energy prices remain elevated, this will happen in the near future monetary policy response make necessary. The final index level of the consumer price index (CPI) as well as further detailed results for May will be announced by Statistics Austria on June 17th.