Austrian Consumer Prices Unchanged in May From April
Vienna, June 19 (Bloomberg) -- Austrian consumer prices were unchanged in May, as lower vegetable and cement prices outweighed higher fuel prices, the nation's statistics office reported.
Consumer prices rose 1.7 percent from May 1999, after climbing an annual 1.9 percent in April. Based on European Union standards, the cost of living increased 1.6 percent from a year earlier, and dropped 0.1 percent from April.
Though Austrian fuel prices rose about 20 percent from the previous year after Brent crude oil prices rose 72 percent to an average $27.32 a barrel in May, the nation's inflation rate is well below the European Central Bank's 2 percent ceiling.
``We think the inflation rate will go up to 2.1 percent in June, when the higher taxes on vehicles come into effect,'' said Josef Christl, an economist at CA IB Investmentbank AG. ``But our estimate for the full year is an average of 1.8 percent.''
Vehicle taxes were raised 51 percent on June 1, one of many measures introduced by the new government aimed at increasing revenue to help close the budget gap. Those taxes have been included in the basket of goods used to measure Austrian inflation for the last 20 years, the statistics office said.
Christl said that while Brent crude oil prices rose 18 percent in May from April, regular and gasoline retail prices both rose just 1.7 percent because ``politicians put the oil companies under pressure to keep prices low last month.''
Month-on-month gains in fuel prices were offset, though, by a 5.5 percent decline in cement prices and a 3.5 percent drop in vegetable prices.
Oil's Impact
Still, the 20 percent increase in fuel prices from May 1999 boosted Austria's annual inflation rate by a third, the statistics office said. Liquid fuel prices alone surged 33 percent in May from a year earlier.
Indeed, ECB council member Klaus Liebscher said in an interview with Bloomberg last week that rising oil prices may fuel even faster inflation in the euro 11 region.
The ECB raised its benchmark lending rate on June 8 by a greater-than-expected 50 basis points to 4.25 percent to ward off inflation driven by the increasing costs of imported goods as a result of the euro's slide against the dollar and climbing oil prices.
Eurostat, the European Union's statistics office, is expected to report later today that consumer price inflation in the euro region rose 0.2 percent in May, bringing the year-on- year cost-of-living increase to 2 percent, according to the median forecast of 15 economists polled by Bloomberg News.
The ECB uses inflation figures provided by Eurostat as a gauge for setting rates for Austria, Germany, France, Italy, the Netherlands, Luxembourg, Belgium, Finland, Ireland, Portugal, and Spain.
Jun/19/2000 5:53 ET |
