The high prices still had an impact on many customers, says Monika Köppl-Turyna, head of the industry-related economic research institute EcoAustria. Köppl-Turyna expects wage settlements below the inflation rate, i.e. real wage losses.
The prices, especially for electricity and gas, have risen sharply and the first companies are therefore considering plant closures. But “the big problems are yet to come,” says Monika Köppl-Turyna, head of the industry-related economic research institute EcoAustria. Because the high prices on the spot market have not yet had an impact on many customers because they are still secured thanks to forward transactions. The stronger effects on the economy are expected in 2023 or 2024.
“The turn of the year will be an exciting moment, as many hedges will expire and hedges will have to be replaced,” says Köppl-Turyna. She has made a model calculation of how the economy could develop in the coming years. Whereby she expressly restricted that the markets are currently extremely changeable and the forecast is subject to unusually high uncertainties.
Even in 2026 there is still no drop to two percent inflation
But Köppl-Turyna assumes that economic output will be 20 billion euros weaker next year than without the energy crisis and that there will be a “mild recession”, i.e. a contraction in economic output. In 2024 there is hope for slight economic growth. Inflation, on the other hand, is likely to be over ten percent in 2023 – and also in 2024. Even in 2026, the economic researcher sees no decline in the inflation rate to values close to that of the European Central Bank (ECB) desired two percent. Around 120,000 jobs could be lost, with short-time work only being able to secure jobs for a while. How many people become unemployed also depends on the outcome of the collective agreement negotiations, Köppl-Turyna points out. She expects deals below the inflation rate and thus real wage losses.
However, EcoAustria has also calculated whether a cap on gas prices, as in Spain and Portugal, would be an option. In principle, there should be a European solution as long as electricity can be exported more expensively from Austria. But to prevent coal-fired power plants from being subsidized as well, the subsidy limit for gas would have to be set at EUR 125 per MWh – three times the value in Spain. That would lead to an electricity price of 300 euros per MWh. Although that would be 40 percent lower than in September, it would still be well above the long-term average and would “offer strong incentives to reduce consumption”. Such a measure would cost taxpayers 1.5 billion euros a year. If district heating were also supported, the costs would be almost 2 billion euros.
Köppl-Turyna warns that the design of subsidies for companies must be made “very carefully” in order not to subsidize risky behavior by companies that have obtained energy from spot markets, for example. It is important to reduce the demand for energy, which must not be prevented by subsidies.
(WHAT)