Austrian Bank predicts inflation dip, schools grapple with headscarf ban, retirement age debate heats up

The Austrian National Bank expects consumer price growth to average 3% in 2026 and decline to 2.3% in 2027, moving closer to the European Central Bank’s 2% goal, while GDP is projected to rise modestly at 0.5% this year and around 1.2-1.3% in the following years. A flash CPI reading showed 3.2% inflation in August, but the forecast warns that higher energy and food prices could push 2027 inflation to 5.6%. In education, the newly introduced headscarf ban for girls under 14 has already caused isolated incidents, with some pupils sent home or questioned, though authorities in Lower Austria report a relatively calm rollout.

The ban’s enforcement can lead to fines up to €800 after repeated breaches. On pensions, WIFO director Gabriel Felbermayr advocated raising the statutory retirement age to 67 and linking future increases to life expectancy, a proposal welcomed by NEOS but rejected by SPÖ, FPÖ and the ÖGB, while some suggest a bonus-malus scheme for older workers. Additionally, Agriculture Minister Norbert Totschnig called on the public to report Asian hornet sightings after nests were removed in Vorarlberg and Tyrol, advising against attempting to capture the insects.