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The annual inflation rate in Austria eased to 2% in January 2026 from 3.8% in the previous month. This marked the lowest reading since December 2024, mainly driven by a 4.9% drop in energy prices after the base effects of the electricity price cap faded, energy taxes were cut, and renewable energy subsidies were reduced. Prices for industrial goods also rose only marginally by 0.8%, while inflation for services and for food, tobacco and alcohol slowed to 3.8% and 2.7%, respectively. “This means that, following the high inflation rates of 2025, inflation in Austria will fall back to the levels seen in the second half of 2024. Electricity, gas, heating oil, fuel and industrial goods had a dampening effect”, according to Manuela Lenk, Director General Statistics at Statistics Austria. On a monthly basis, consumer prices fell by 0.7% in January, marking the first decline in four months and the sharpest since January 2019, following a 0.3% gain in the preceding period.