The Harmonised Inflation Rate MoM for Austria (AT) moderated to 0.30% in December 2025, easing from 0.50% in November but remaining above the near-zero readings observed in October. This deceleration signals a tentative cooling in price pressures, yet inflation remains sticky compared to the 12-month average MoM rate of approximately 0.40% over the past year. The data, sourced from the Sigmanomics database, reflects ongoing challenges in balancing inflation containment with growth support amid global uncertainties.

Drivers this month

• Shelter costs contributed 0.12 percentage points (pp), reflecting persistent housing demand.
• Energy prices added 0.08 pp, down from 0.15 pp last month due to easing commodity prices.
• Food inflation slowed, subtracting -0.05 pp, helped by improved supply chains.
• Transport and used cars inflation remained flat, contributing marginally to the overall rate.

Policy pulse

The 0.30% MoM inflation reading remains above the European Central Bank’s (ECB) 2% annual target when annualized, indicating persistent inflationary pressures. The ECB’s recent rate hikes appear to be gradually tempering inflation, but the pace of decline is slower than anticipated. This suggests a cautious monetary policy stance will likely continue into early 2026.

Market lens

Immediate reaction: The EUR/AUD currency pair dipped 0.15% within the first hour post-release, reflecting mild disappointment versus expectations. Short-term government bond yields in Austria (AT10Y) fell by 3 basis points, signaling a slight easing in inflation risk premia.

Austria’s inflation dynamics must be viewed alongside core macroeconomic indicators. GDP growth for Q3 2025 held steady at 0.40% QoQ, while unemployment remained low at 4.80%, supporting consumer spending. Wage growth accelerated modestly to 2.10% YoY, sustaining demand-side inflation pressures.

Monetary Policy & Financial Conditions

The ECB’s deposit rate stands at 3.75%, unchanged since October 2025. Financial conditions have tightened, with credit spreads widening slightly amid global risk aversion. The Austrian National Bank’s (OeNB) forward guidance signals no immediate rate cuts, emphasizing vigilance against inflation persistence.

Fiscal Policy & Government Budget

Austria’s fiscal stance remains moderately expansionary, with a 2025 budget deficit forecast at 1.80% of GDP. Increased social spending and energy subsidies cushion households from inflation shocks but limit fiscal space to counteract inflation further.

External Shocks & Geopolitical Risks

Energy market volatility, driven by geopolitical tensions in Eastern Europe, continues to influence inflation. However, recent easing in natural gas prices has helped temper headline inflation. Trade disruptions remain limited, but global supply chain fragilities persist.

Drivers this month

• Energy inflation eased from 0.15 pp in November to 0.08 pp in December.
• Shelter costs remained a steady inflation driver at 0.12 pp.
• Food price inflation declined, subtracting -0.05 pp.

Policy pulse

The inflation moderation aligns with the ECB’s tightening cycle effects but suggests that core inflation components remain sticky. The current reading supports a cautious approach to further rate hikes.

Market lens

Immediate reaction: Austrian 2-year yields declined by 4 basis points, reflecting market relief at slower inflation growth. The EUR/CHF pair remained stable, indicating balanced sentiment.

Looking ahead, Austria’s inflation trajectory will depend on several factors, including energy prices, wage growth, and external shocks. The base case scenario forecasts a gradual decline in MoM inflation to around 0.20% by Q2 2026, assuming stable energy markets and moderate wage increases.

Bullish scenario (20% probability)

• Energy prices fall sharply due to geopolitical détente.
• Supply chain normalization accelerates, easing goods inflation.
• Inflation drops below 0.10% MoM by mid-2026, enabling ECB rate cuts.

Base scenario (60% probability)

• Energy prices remain stable with minor fluctuations.
• Wage growth continues moderately at 2% YoY.
• Inflation gradually declines to 0.20% MoM by mid-2026.

Bearish scenario (20% probability)

• Energy prices spike due to renewed geopolitical tensions.
• Wage-price spirals intensify, pushing inflation above 0.50% MoM.
• ECB forced to maintain or increase rates, risking growth slowdown.

Austria’s December 2025 Harmonised Inflation Rate MoM reading of 0.30% signals a cautious easing of inflation pressures. While this is a positive development, inflation remains above the ECB’s target, underscoring the need for continued monetary vigilance. Fiscal policy’s limited room and external risks, especially in energy markets, pose downside risks. Financial markets have reacted moderately, reflecting balanced optimism and caution. Structural trends such as housing costs and wage growth will continue to shape Austria’s inflation path in the medium term.

Key Markets Likely to React to Harmonised Inflation Rate MoM

Austria’s inflation data typically influences European bond yields, currency pairs involving the euro, and select equities sensitive to inflation trends. Market participants watch these closely to gauge monetary policy shifts and economic momentum.

• OMV – Austria’s energy giant, sensitive to inflation and energy price shifts.
• EURAUD – Reflects euro strength and inflation expectations.
• EURCHF – Swiss franc as a safe haven reacts to inflation surprises.
• VOE – Vienna Stock Exchange index, sensitive to macroeconomic shifts.
• BTCUSD – Bitcoin as an inflation hedge alternative.

Insight: Harmonised Inflation Rate MoM vs. OMV Stock Price Since 2020

Since 2020, OMV’s stock price has shown a positive correlation with Austria’s inflation rate, particularly driven by energy price inflation. Periods of rising inflation, such as mid-2022, coincided with OMV’s price surges, reflecting energy sector profitability. Conversely, inflation dips often preceded OMV corrections. This relationship underscores OMV’s sensitivity to inflation dynamics and energy market shifts.

FAQs

What is the Harmonised Inflation Rate MoM for Austria?

The Harmonised Inflation Rate MoM measures monthly changes in consumer prices across Austria, harmonized for EU comparability.

How does the latest inflation reading impact monetary policy?

The 0.30% MoM inflation suggests a slowing but persistent inflation, supporting cautious ECB rate policies.

Why is inflation important for investors?

Inflation affects purchasing power, interest rates, and asset valuations, guiding investment decisions.

Final Takeaway

Austria’s inflation moderation in December 2025 signals progress but not victory. Policymakers and markets must navigate persistent inflation risks amid global uncertainties.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 12/2/25