VIENNA, Aug. 8 (Xinhua) -- Austria's hyperinflation has been contained, with the inflation rate coming down closer to the eurozone average in the past months, but business sentiment in the country remains "extremely pessimistic," the Austrian Institute of Economic Research (WIFO) said on Thursday.
High inflation, driven by "buoyant demand for leisure and tourism services, fiscal policy measures and strong wage increases," has pushed Austria's inflation rate to one of the highest among eurozone countries over the past few years. According to the WIFO report, Austria's inflation rate has edged down closer to the eurozone average, with the gap narrowing from 2.8 percentage points in December 2023 to 0.3 percentage points in July 2024.
Statistics Austria also said in a flash estimate at the end of July that Austria's inflation rate for July is expected to stand at 2.9 percent, marking the first time in three years that the monthly figure has dropped below 3 percent.
However, "the cumulative rise in consumer prices (in Austria) in recent years has been much stronger than in the euro area," said Stefan Schiman-Vukan, who authored the WIFO report.
The report said despite the falling inflation, the sentiment among domestic companies, particularly in the manufacturing industry, remains very bleak.
"Capacity utilization in industry has been low for a year now," the report read. "More and more companies are seeing a deterioration in their competitive position, especially on foreign markets."
According to a flash estimate by WIFO in late July, Austria's economy stagnated in the second quarter (Q2) of 2024, mainly due to the lackluster performance of its industry and construction sectors. Its gross domestic product (GDP) in Q2 showed zero growth in real terms compared to the previous quarter, and Q2 is "the eighth quarter in a row with weak overall economic momentum or a decline" for Austria. ■
