While inflation is falling in the euro zone, it is still rising in Austria. National Bank Governor Robert Holzmann sees black for loans.
According to a flash estimate, inflation in the euro zone for January 2023 is 8.5 percent – it has therefore fallen slightly compared to the previous months. In Austria, on the other hand, inflation seems to be continuing almost unabated. In Austria, inflation hit 11.1 percent in January and has therefore continued to rise. That brought the governor of the National Bank, Robert Holzmann, to a gloomy announcement for Austrian borrowers late on Friday evening in “ZIB2” with ORF moderator Martin Thür.
“Unfortunately, it will be inevitable that some households will have problems with the variable interest rates, especially if they took them out very late,” said the expert. Inflation will continue and the European Central Bank will have to raise interest rates further, says Holzmann. Interest rates are currently at 2.5 percent – but how high can it go? The National Bank governor indicated that it could be up to five percent. Variable interest rates on loans are always a “double-edged sword,” warned Holzmann.
“Until we see real success in declining inflation”
So this year we will continue to see regular interest rate hikes – but the expert also had good news. According to Holzmann, the peak of interest rate hikes could already be reached in the third quarter of 2023 – and the value could already drop significantly again in the fourth quarter or early 2024. Before that, however, the rate hikes would continue “until we see real success in reducing inflation”. But: As early as December, a “significantly lower rate of inflation can be expected,” says Holzmann.
“The main reasons for this are strong price increases for household energy, despite the electricity price brake: The background is that the measures to contain network costs, which have now risen sharply, will probably only take effect from March. Despite the electricity price brake, the full value added tax will also apply. In contrast, fuel prices rose comparatively in January easy,” Statistics Austria Director General Tobias Thomas had already explained in the past. Specifically, the consumer price index rose by 11.1 percent compared to the same month last year, compared to the previous month the increase is plus 0.8 percent.
