Inflation and State Budgets in Austria

The sustained high inflation of recent years has direct and indirect effects on budgets at all levels of government. Due to the delayed effects of inflation on revenues and expenditures, a comprehensive assessment of budgetary inflationary consequences over multiple years is necessary. The study analyses, through a comparison of various inflation scenarios, the effects of the inflationary development on the budgets of states and municipalities for the period from 2022 to 2025. As a result, revenue increases lag behind the induced additional expenditures of subnational government entities.