Wifo chief warns rising energy costs could push inflation higher amid Middle East tensions
Wifo director Gabriel Felbermayer says Middle East conflicts will lift energy prices, likely raising inflation and prompting a lower growth outlook for 2026.
In an ORF Press Hour interview, Wifo president Gabriel Felbermayer connected ongoing Middle East tensions to expected increases in energy prices, which he believes will raise overall inflation. He announced that the institute will revise its 2026 economic growth forecast downward, reflecting a tighter outlook. Felbermayer highlighted that about half of Austria’s annual electricity pricing remains linked to gas under one outlet merit-order regime and urged a separation to prevent gas price spikes—currently around €80 per megawatt hour—from being passed to power bills.
He argued that recent temporary measures, including a fuel-price brake and reduced VAT on basic foods, have only modestly softened price pressures and cannot achieve a 2 percent inflation target. The economist also opposed margin controls on oil firms, warning they could jeopardize supply security, and noted that Austria’s gas storage is roughly two-thirds full, a level he considers adequate compared with the rest of Europe.
Why it matters
Rising energy costs could erode household purchasing power and force policy adjustments to inflation targets and growth forecasts.
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