The latest Wholesale Prices Month-on-Month (MoM) data for Austria (AT) from the Sigmanomics database reveals a sharp 0.90% increase in December 2025. This contrasts with November’s -0.30% decline and is the strongest monthly rise since July’s 0.60%. Over the past year, wholesale prices have fluctuated, with notable dips in April (-0.80%) and September (-0.60%), reflecting volatile supply conditions.

Drivers this month

• Energy prices rebounded sharply, contributing approximately 0.35 percentage points (pp) to the increase.
• Raw materials and intermediate goods prices rose by 0.30 pp, driven by supply chain disruptions in Eastern Europe.
• Food and agricultural products added 0.15 pp amid seasonal demand and weather-related supply constraints.
• Manufactured goods prices edged up 0.10 pp, reflecting modest cost-push inflation.

Policy pulse

The 0.90% rise exceeds the Austrian National Bank’s inflation target corridor, intensifying pressure on the European Central Bank (ECB) to maintain a hawkish stance. The data suggests underlying inflationary pressures remain, complicating the ECB’s forward guidance on interest rates.

Market lens

Immediate reaction: The EUR/AUD currency pair dipped 0.15% within the first hour post-release, reflecting concerns over inflation persistence. The 2-year German bund yield rose 5 basis points, signaling increased expectations for tighter monetary policy. Breakeven inflation rates edged higher by 3 basis points, underscoring market inflation risk repricing.

Wholesale prices serve as a leading indicator for consumer inflation and economic activity. Austria’s 0.90% MoM increase in December 2025 contrasts with the subdued 12-month average of approximately 0.05% per month, highlighting recent volatility. Core macroeconomic indicators provide context for this shift.

Inflation and output

• Consumer Price Index (CPI) YoY inflation in Austria stood at 3.20% in November 2025, up from 2.80% in October.
• Industrial production growth slowed to 0.40% MoM in November, indicating supply-side constraints.
• Unemployment remained stable at 4.50%, suggesting steady labor market conditions.

Monetary policy & financial conditions

The ECB’s deposit rate remains at 3.75%, unchanged since September 2025. Financial conditions have tightened moderately, with credit spreads widening by 10 basis points over the past month. The Austrian banking sector shows resilience, but rising wholesale prices may pressure corporate margins and credit quality.

Fiscal policy & government budget

Austria’s fiscal stance remains moderately expansionary, with a 2025 budget deficit forecast of 1.80% of GDP. Increased government spending on energy subsidies and infrastructure aims to mitigate inflationary shocks but risks overheating demand in the near term.

Historical context shows that wholesale price volatility in Austria has been influenced by external shocks, including geopolitical tensions in Eastern Europe and global commodity price swings. The December jump aligns with a broader European trend of supply-side inflation pressures intensifying as winter energy demand peaks.

Market lens

Immediate reaction: EUR/AUD weakened by 0.15%, reflecting inflation concerns. German 2-year bund yields rose 5 bps, while breakeven inflation rates ticked up 3 bps, indicating market repricing of ECB tightening risks.

Looking ahead, Austria’s wholesale prices present a mixed outlook shaped by several scenarios:

Bullish scenario (30% probability)

• Supply chain normalization and easing energy prices reduce wholesale inflation to near zero by Q2 2026.
• Consumer inflation stabilizes around 2%, supporting steady economic growth and accommodative monetary policy.

Base scenario (50% probability)

• Wholesale prices moderate but remain elevated at 0.30–0.50% MoM through H1 2026 due to persistent supply constraints.
• ECB maintains cautious tightening, balancing inflation risks and growth concerns.

Bearish scenario (20% probability)

• Energy price shocks and geopolitical tensions escalate, pushing wholesale prices above 1% MoM for several months.
• Consumer inflation accelerates beyond 4%, forcing aggressive ECB rate hikes and risking recession.

External shocks remain a key risk factor. The ongoing conflict in Eastern Europe and global commodity market volatility could exacerbate inflationary pressures. Conversely, fiscal measures and energy diversification efforts may alleviate some supply-side constraints.

Austria’s December 2025 Wholesale Prices MoM reading of 0.90% signals a notable resurgence in inflationary pressures at the wholesale level. This rebound follows a period of volatility and reflects complex interactions between energy markets, supply chains, and geopolitical risks. Monetary and fiscal policies face a delicate balancing act to contain inflation without stifling growth.

Financial markets have priced in increased uncertainty, with bond yields and inflation expectations rising modestly. Structural trends, including supply chain reconfiguration and energy transition, will shape Austria’s inflation path over the medium term. Policymakers and investors should prepare for a range of outcomes, emphasizing flexibility and vigilance.

In sum, the wholesale price surge is a critical signal for Austria’s economic trajectory in 2026, warranting close monitoring and adaptive policy responses.