Austria flag Austria: Economic and Political Overview

The economic context of Austria

Economic Indicators

The Austrian economy is deemed one of the most stable in Europe. The country relies on a very strong network of export-focused SMEs, excellent academic standards and significant spending for research and development. After growing 4.8% in 2022, Austria’s GDP stagnated in 2023 (+0.1% as per the IMF; although the EU Commission’s first estimates point to a negative growth of 0.5%), with a slowdown in activity observed during the first semester, followed by a gradual recovery in the latter part of the year. The manufacturing sector has been in a recession since mid-2022 due to significantly reduced demand from its primary export destination, Germany; whereas the robust momentum witnessed in the services sector, particularly in financial and economic services, as well as tourism, helped keep the country’s economy afloat. A gradual easing of high inflation over the forecast horizon should contribute to a slight uptick in economic activity for 2024 and 2025, with forecasted real GDP growth rates of 0.8% and 1.7%, respectively (IMF). This envisaged trajectory is supported by an anticipated resurgence in private consumption, fueled by the resumption of real wage growth. Furthermore, a recovery in the export sector is expected to contribute to this dynamic. Nevertheless, the prospect of tepid investment development, particularly in the construction sector due to elevated interest rates, may exert a dampening effect on overall economic growth.

Thanks to the phasing out of support measures taken in the context of the pandemic and of those intended to mitigate the impact of high energy prices, the general government deficit decreased from 3.6% of GDP in 2022 to an estimated 2.1% in 2023, when an increase was recorded in tax revenue and social contributions due to a robust labour market and high inflation. Despite sluggish growth, the deficit should follow a downward trend in 2024 and 2025 (at 1.3% and 1.2%, respectively – 2.4% and 2.2% as per the EU Commission projections) as the total net budgetary cost of energy-related measures is projected to decrease to 0.1% of GDP in 2024 from 1.6% one year earlier. Nominal GDP growth is poised to contribute to a sustained decline in the public debt-to-GDP ratio. IMF projections indicate a reduction from 78.5% in 2022 to 74.8% in 2023, followed by a subsequent decrease to 74% in 2024 and a further decline to 71.7% in 2025. Meanwhile, inflation remained high in 2023 (7.8%), driven by significant real wage increases, but is expected to gradually subside over the forecast horizon (3.7% and 2.5% in 2024 and 2025, respectively).

Austria has a low percentage of unemployment compared to other countries in the Eurozone and the EU, as well as global comparison. Although it increased marginally in 2023 (to 5.1%, from 4.8% one year earlier as the increase in labour supply outpaced employment growth), the unemployment rate is still at a historically low level. This trend is expected to continue in 2024, with a projected unemployment rate of 5.4% before starting to decrease again (IMF). According to the latest figures by the EU Commission, nominal wages increased by 8.3% in 2023 and should continue on an upward trend (7.1% in 2024 and 3.9% in 2025), driven by inflation and the tight labour market. Overall, Austrians enjoy one of the highest GDP per capita (PPP) in Europe, estimated by the IMF at USD 69,069 in 2023.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 471.22519.71540.89561.73581.02
GDP (Constant Prices, Annual % Change) 4.8-
GDP per Capita (USD) 52,48457,08159,22561,35463,303
General Government Balance (in % of GDP) -4.3-2.3-2.1-2.1-1.9
General Government Gross Debt (in % of GDP) 78.475.575.475.475.5
Inflation Rate (%)
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -1.379.4411.3311.7812.13
Current Account (in % of GDP) -

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

Out of its 8.95 million population, Austria has a labour force of about 4.7 million people, of whom many are highly educated and skilled. The agricultural sector employs 4% of the active population and represents 1.4% of GDP (World Bank, latest data available). Of the total area, 32% is agricultural land while forests cover 44%. About half of the utilised agricultural area is arable land and the other half is mostly permanent grassland. Cattle farming and viticulture are the country's main agricultural activities. There are more than 110,000 farms in Austria, while the average farm manages about 20 hectares of land (EU Commission). Organic farming is incredibly popular in Austria: according to the latest available data (IFOAM), around one-fourth of all its farms are organic and cover over a quarter of the total agricultural area, the highest rate in the EU and the second in Europe after Liechtenstein. Austria benefits from significant subsidies from the European Union provided by the Common Agricultural Policy, consequently, agricultural exports are continuously increasing. The regions of Lower Austria, Styria and Upper Austria are those with the highest number of agricultural and forestry holdings (Statistics Austria).

The industrial sector, which is comprised of SMEs connected to the Central European markets, represents 26.1% of the GDP and employs one-fourth of the active population (26%). The manufacturing sector alone represents 16% of GDP (World Bank). The main industrial sectors are the metal industry, electrochemistry and engineering. Over the past fifteen years, Austria has successfully implemented policies for the economic specialization of each region (Lander): Upper Austria (iron, steel, chemical and mechanical engineering), Salzburg (electrics, wood and paper), Vorarlberg (textile, clothing), Carinthia (wood, pulp and paper industry), Styria (automobiles, manufacturing) and Vienna (financial services). The renewable energies sector, especially hydroelectric power, is booming and its performance has exceeded those of the tourism and construction sectors, while the mechanical engineering sector grew by 140% in the last 20 years, with a pace ten times higher than the euro-area average. According to the Austrian Institute of Economic Research, for 2023 as a whole, industrial production was expected to fall by 2% compared to the previous year.

The services sector dominates the economy, contributing 62.1% of GDP and employing 71% of the country's active population. Every sixth job is provided by tourism, which has a major impact on the country’s economy. According to the latest available information from the Austrian Statistical Office, tourism accounts for 2.7% of the country’s GDP, with an added value (direct and indirect) of more than EUR 10.8 billion. However, these figures are much lower than the pre-COVID level (5.2% of GDP and EUR 20 billion, respectively). Concerning the banking sector, the Austrian network consists of 520 banks with around 3,420 branches holding EUR 1,197.2 billion in total assets on a consolidated basis (European Banking Federation).

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 3.7 25.6 70.6
Value Added (in % of GDP) 1.3 26.2 62.1
Value Added (Annual % Change) 4.7 3.3 6.2

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

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Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

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Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024


Country Risk

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Sources of General Economic Information

Federal Ministry of Science, Research and Economy
Federal Ministry for Europe, Integration and Foreign Affairs
Statistical Office
Statistics Austria
Central Bank
Central Bank of Austria
Stock Exchange
The Vienna Stock Exchange
Economic Portals
Trend Magazin
Industrie Magazin

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Latest Update: June 2024