Rising rents fuel inflation

Prices climbed by more than two per cent last month.

Statistik Austria said yesterday (Weds) the inflation rose by 2.3 per cent, meaning that the average price of predicts and services on offer in Austria climbed to this extent from April 2011 to the same month of this year. This is the lowest rise since December 2010, researchers stressed.

Especially car petrol prices (plus 3.8 per cent) and housing costs (plus 3.4 per cent) increased last month, according to Statistik Austria. Economy Minister Reinhold Mitterlehner of the Austrian People’s Party’s (ÖVP) said last month he would set up a fuel price corridor. Mitterlehner said drivers “must not suffer under mineral oil enterprises’ arbitrariness”. Mitterlehner said he would appreciate if the market caused fair circumstances on its own but added that now was the time to act.

Mineral oil companies and service stations hit back by pointing out that drivers in most other European countries were paying more for petrol. Car clubs and the Austrian Traffic Club (VCÖ) supported Mitterlehner concerning the price corridor policy. The Alliance for the Future of Austria (BZÖ) called for stricter laws against businesspeople caught manipulating prices while the Freedom Party (FPÖ) said the federal model of subsidisations for commuters should be reformed.

Statistik Austria’s housing costs price check includes rent, heating expenses and the price of tap water supply. People using gas to heat their homes had to pay 11.6 per cent more for the same amount of the resource in March 2012 than in March 2011.

Speaking about electricity prices, Walter Boltz said Austrians were paying too much. The head of the Austrian energy industry watchdog said prices “should be 10 to 15 per cent lower”. Boltz explained Austrian households should pay between 20 and 25 Euros less a year if providers considered price developments on global energy product trade markets since 2008.

The Labour Chamber (AK) found that apartment rents shot up by 34.5 per cent between 2001 and 2010. AK experts said the domestic inflation climbed by only 21 per cent at the same time. The organisation appealed on real estate dealers to stop charging exaggerated provisions. Austrians’ incomes rose by 22 per cent between 2000 and 2010, according to the AK.

Bernhard Felderer of the Institute for Advanced Studies (IHS) said the inflation would reach 2.2 per cent this year. The annual inflation rose by 3.3 per cent from 2010 to 2011. Karl Aiginger, who heads the Viennese Institute for Economic Research (WIFO), said the inflation would range around 2.4 per cent this year compared to 2011.

Food prices strongly varied in the past months. While coffee became 11 per cent dearer last month compared to April 2011, the average price for fruits and vegetables dropped. Coffee cost 19 per cent more in March 2012 than in the same period of last year. The average inflation of the European Union (EU) – which has 27 members – was 2.7 per cent last month.