Austria Posts 2 Percent Drop in January Inflation

(MENAFN) Austria's inflation rate plummeted to 2 percent in January, marking a dramatic decline from December's 3.8 percent as tumbling energy costs eased broader price pressures across the economy, government statistics revealed Wednesday.

Flash estimates published by Statistics Austria indicate the sharp deceleration signals a return to mid-2024 pricing dynamics following an extended period of elevated consumer costs.

"Following the high inflation rates of 2025, inflation in Austria will fall back to the levels seen in the second half of 2024," said Manuela Lenk, director general statistics at Statistics Austria.

The pronounced downturn stems primarily from expiring base effects tied to electricity pricing alongside substantial reductions across the energy sector. Costs for electricity, natural gas, heating oil, and motor fuels all contracted significantly.

Energy expenditures decreased 4.9 percent year-over-year in January, according to Statistics Austria.

Service sector pricing continues exerting the strongest upward force on the consumer price index, with service costs climbing 3.8 percent compared to January of the previous year. Food, tobacco, and alcoholic beverages posted a 2.7 percent annual increase.

The inflation data suggests Austria's economy is experiencing relief from the energy-driven price spikes that characterized much of 2025, though service sector inflation remains stubbornly elevated compared to other consumer categories.

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