soaring costs for housing, electricity, and water in Austria, resulting in increased spending for residents
In July 2025, Austria's inflation rate rose to 3.5% annual inflation, marking the highest level since April 2024. This increase is primarily attributed to sectors such as industrial goods, energy, food, and services.
The housing and energy sector experienced a significant rise, with energy prices increasing by 4.3% year-on-year. Gas and heating oil prices had less of a dampening effect than before, indicating a rise in costs for home heating and energy consumption. The service sector, which includes housing-related services, showed a steady inflation rate of around 4.5%, the largest contributor to overall inflation.
The food, tobacco, and alcohol sector continues to experience persistently high inflation, with prices up by about 4.4% year-on-year. Fuel prices, reflected as part of energy costs, have also risen significantly by 4.3%.
Leisure activities (services) remain strongly inflationary, with prices increasing by approximately 4.5%. Reports suggest that inflation in services will remain above the eurozone average throughout 2025, partly due to cost pressures and public sector fee increases.
In contrast, airline tickets became slightly cheaper by 2.7%, and cheaper fuels, airline tickets, and package holidays contributed to a decrease in inflation in March 2023. Used cars also saw a 3.2% increase in cost.
In the hospitality sector, prices rose twice as fast as the general inflation rate in March 2023, with restaurants and hotels increasing by an average of 5.8%. However, coffee prices surged by 17.7%.
Electricity prices rose by 36.3% in March 2023, making it the main driver of prices in Austria. Household energy was the main contributor to the increase in housing, water, and energy costs, with an inflation rate of 8.3%.
Despite the elevated inflation, the Statistics Austria chief, Tobias Thomas, sees the 2.9% inflation (CPI) as a step towards the 2.0% inflation target of the European Central Bank (ECB). In March 2023, the inflation rate in Austria was 2.9%, a decrease from the 3.2% recorded in January and February 2023.
New cars, on the other hand, became slightly cheaper, with a 0.2% decrease in cost. Prices in the food and non-alcoholic beverages sector increased by 3.1%, and oils and fats rose by 7.1%.
Overall, inflation in Austria in mid-2025 is elevated compared to previous months and driven by rising industrial goods, energy/heating costs, persistently high food prices, and ongoing inflationary pressures in services including leisure. Monthly consumer prices rose 0.2% in July, a slowdown from June’s 0.5%, but the yearly rate clearly shows upward momentum.
- In light of the rising inflation rates, individuals may need to reevaluate their personal-finance strategies and seek advice from wealth-management experts to manage their money effectively.
- The steep increase in industrial goods, energy, food, and service prices highlights the importance of careful business financial planning to absorb these increased costs and maintain profitability.
