{
  "title": "Austria: Selected Issues",
  "publication": "IMF Staff Country Reports, May 13, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2024/05/10/austria-selected-issues-548780",
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  "summary": "This Selected Issues paper analyzes drivers of core inflation in Austria. Inflation in Austria has declined on falling energy prices, but the pace of its return to the two percent target is uncertain.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Analyzes drivers of core inflation in Austria.\n- Notes that inflation in Austria has declined on falling energy prices, but the pace of its return to the two percent target is uncertain.\n- Uses two complementary perspectives to assess likely pace of disinflation:\n  - Differences in inflation trends between core goods and services with relatively high versus relatively low energy-input content.\n  - A parsimonious econometric model to generate forecasts of core inflation."
    },
    {
      "heading": "Methods and analytical approach",
      "content": "- Comparative analysis of inflation trends by energy-input content:\n  - Examines core goods and services with relatively high energy-input content versus those with relatively low energy-input content.\n- Econometric forecasting:\n  - Employs a parsimonious econometric model.\n  - Identifies euro-area inflation as a key determinant of Austrian inflation in the model."
    },
    {
      "heading": "Key findings",
      "content": "- There are good reasons to expect core inflation to keep falling as lower energy prices continue to pass through to core prices.\n- Euro-area inflation’s continued decline supports further disinflation in Austria.\n- Despite these downward forces, IMF staff do not project Austrian inflation to reach the two percent target for some time, given:\n  - Inflation’s current elevated level.\n  - Somewhat sticky services inflation."
    },
    {
      "heading": "Projections and scenarios",
      "content": "- Forecasts generated by the parsimonious econometric model indicate continued disinflation driven by:\n  - Ongoing pass-through of lower energy prices to core prices.\n  - Declining euro-area inflation as an external influence.\n- No specific numeric forecast values are provided on this page; the overall projection is that the two percent target will not be reached for some time."
    },
    {
      "heading": "Policy implications and considerations",
      "content": "- Monitoring the pass-through of lower energy prices to core goods and services is important for assessing the pace of disinflation.\n- Close attention to services inflation dynamics is warranted because of observed stickiness that could delay return to the two percent target.\n- Euro-area inflation developments should be factored into national inflation outlooks and policy planning given their model-identified importance.\n\n---\n\n Content in this bundle\n\n- Austria: Selected Issues; IMF Country Report No. 24/108; April 19, 2024\n  - Austria: Selected Issues; IMF Country Report No. 24/108; April 19, 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Austria: Selected Issues; IMF Country Report No. 24/108; April 19, 2024 (PDF){rel=\"external\" type=\"application/pdf\"}"
    }
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    "Published: May 13, 2024",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400276101.002",
    "Analyzes drivers of core inflation in Austria.",
    "Notes that inflation in Austria has declined on falling energy prices, but the pace of its return to the two percent target is uncertain.",
    "Uses two complementary perspectives to assess likely pace of disinflation:",
    "Comparative analysis of inflation trends by energy-input content:",
    "Econometric forecasting:",
    "There are good reasons to expect core inflation to keep falling as lower energy prices continue to pass through to core prices.",
    "Euro-area inflation’s continued decline supports further disinflation in Austria.",
    "Despite these downward forces, IMF staff do not project Austrian inflation to reach the two percent target for some time, given:",
    "Forecasts generated by the parsimonious econometric model indicate continued disinflation driven by:",
    "No specific numeric forecast values are provided on this page; the overall projection is that the two percent target will not be reached for some time.",
    "Monitoring the pass-through of lower energy prices to core goods and services is important for assessing the pace of disinflation.",
    "Close attention to services inflation dynamics is warranted because of observed stickiness that could delay return to the two percent target.",
    "Euro-area inflation developments should be factored into national inflation outlooks and policy planning given their model-identified importance.",
    "**Austria: Selected Issues; IMF Country Report No. 24/108; April 19, 2024**"
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