## Austria: Selected Issues

_IMF Staff Country Reports, May 13, 2024_

## Source details

**Canonical URL:** [Austria: Selected Issues](https://www.imf.org/en/publications/cr/issues/2024/05/10/austria-selected-issues-548780)

## Other formats

- [Markdown version](/en/publications/cr/issues/2024/05/10/austria-selected-issues-548780/index.md)
- [Structured JSON version](/en/publications/cr/issues/2024/05/10/austria-selected-issues-548780/index.json)
- [Bundle manifest](/en/publications/cr/issues/2024/05/10/austria-selected-issues-548780/bundle-manifest.json)

## Bibliographic details
- Published: May 13, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400276101.002

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### Overview
- 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:
  - Differences in inflation trends between core goods and services with relatively high versus relatively low energy-input content.
  - A parsimonious econometric model to generate forecasts of core inflation.

### Methods and analytical approach
- Comparative analysis of inflation trends by energy-input content:
  - Examines core goods and services with relatively high energy-input content versus those with relatively low energy-input content.
- Econometric forecasting:
  - Employs a parsimonious econometric model.
  - Identifies euro-area inflation as a key determinant of Austrian inflation in the model.

### Key findings
- 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:
  - Inflation’s current elevated level.
  - Somewhat sticky services inflation.

### Projections and scenarios
- Forecasts generated by the parsimonious econometric model indicate continued disinflation driven by:
  - Ongoing pass-through of lower energy prices to core prices.
  - Declining euro-area inflation as an external influence.
- 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.

### Policy implications and considerations
- 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.

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## Content in this bundle

- **Austria: Selected Issues; IMF Country Report No. 24/108; April 19, 2024**
  - [Austria: Selected Issues; IMF Country Report No. 24/108; April 19, 2024 (Markdown version)](/-/media/files/publications/cr/2024/english/1autea2024002.pdf.md){rel="alternate" type="text/markdown"}
  - [Austria: Selected Issues; IMF Country Report No. 24/108; April 19, 2024 (PDF)](/-/media/files/publications/cr/2024/english/1autea2024002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2024/05/10/austria-selected-issues-548780_