Austria flag Austria: Economic outline

Economic Outline

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) 4.8-0.70.41.61.4
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 (%) 8.67.73.92.82.3
Unemployment Rate (% of the Labour Force) 4.85.15.45.25.2
Current Account (billions USD) -1.379.4411.3311.7812.13
Current Account (in % of GDP) -0.31.82.12.12.1

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 GHS 0.240.200.180.170.16

Source: World Bank, 2015

 

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Latest Update: June 2024