German, Austrian Inflation Difference Is a Lifestyle Choice

Austria’s foodies are pushing price growth above that of its neighbor

Rightly or wrongly, Germans are often seen as a pretty frugal bunch. Now Austria, a neighboring nation with plenty of cultural and historical similarities, has uncovered evidence to back that argument, at least when it comes to eating out.

Austria saw prices rise nearly 0.8 percent faster in October than in Germany. And according to the head of economics for the Austrian National Bank, the main reason is that her countrymen like to dine out more than Germans.

After months of observing that the countries’ differing inflation rates mainly traced back to the service sector, Doris Ritzberger-Gruenwald put her researchers on the case and found it was the “catering services” category driving the gap.

“Why is the inflation rate in Austria rising significantly stronger than in our neighboring country Germany, when they face so many similar features?” she said at the Austrian National Bank’s headquarters on Friday, when presenting the results of their findings. “It’s really because of food and drinks that we Austrians clearly like to consume outside our homes more so than Germans.”

While the catering sector in both countries has seen price gains recently, the weighting in Austria’s consumer price basket is nearly three times that of Germany, the economist pointed out.

One could argue that the effect relates to Austria’s buoyant tourism industry – the idea being that travelers consume more than nationals – yet even stripping out that effect shows a similar result, she added. 

Austrians may spend more time in restaurants than Germans, but they don't lead the pack in Europe. That honor falls to the Irish, according to Eurostat data, which shows almost a sixth of the Emerald Isle's consumer price basket is allocated to that category.

— With assistance by Jana Randow

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