A city on a lake in Austria

Austria Economic Forecast

Austria Economic Outlook

In the second quarter, the economy contracted 0.4% in seasonally adjusted quarterly terms, contrasting the 0.1% expansion in Q1. Weaker private consumption, fixed investment and exports drove the reading. Looking ahead, the economy is expected to slow in Q3 amid the lagged effects of the ECB’s rate hikes and soft momentum abroad. The industrial sector appears to be in the doldrums: The manufacturing PMI for July was lower than Q2’s average and well in contractionary terrain. Moreover, weak momentum in construction and related sectors is likely to persist into Q3 due to higher real estate prices, stricter lending regulations and higher rates. On a positive note, a decrease in inflation and improved consumer sentiment in July, together with pent-up demand for travel and leisure, should be supporting the services sector in particular and household consumption in general.

Austria Inflation

Harmonized inflation decreased to 7.0% in July (June: 7.8%) due to broad-based declines in key subsectors. Inflation should decline from current levels later in 2023 but remain above the ECB’s 2.0% target, buoyed by strong nominal wage increases. Stickier-than-expected core inflation and a stronger-than-anticipated tourism season are upside risks.

This chart displays Economic Growth (GDP, annual variation in %) for Austria from 2013 to 2022.

Austria Economic Data

2018 2019 2020 2021 2022
Population (million) 8.9 8.9 8.9 9.0 9.0
GDP (EUR bn) 385 397 381 406 447
GDP per capita (EUR) 43,362 44,832 42,809 45,228 49,536
Economic Growth (Nominal GDP, ann. var. %) 4.3 3.1 -4.1 6.6 10.1
Economic Growth (GDP, ann. var. %) 2.4 1.5 -6.5 4.7 4.9
Domestic Demand (ann. var. %) 2.4 0.4 -5.1 6.3 3.0
Private Consumption (ann. var. %) 1.1 0.6 -7.9 3.4 5.8
Government Consumption (ann. var. %) 1.3 1.3 -0.5 7.8 -0.6
Fixed Investment (ann. var. %) 4.2 4.7 -5.0 8.9 -0.2
Exports (G&S, ann. var. %) 5.1 3.9 -11.4 10.1 9.9
Imports (G&S, ann. var. %) 5.2 2.0 -9.2 13.5 6.7
Industrial Production (ann. var. %) 5.2 1.6 -5.3 9.6 5.9
Wages (ann. var. %) 2.7 3.0 2.3 1.7 3.1
Unemployment (% of active population, eop) 5.2 4.7 6.8 4.8 4.9
Unemployment (% of active population, aop) 5.2 4.8 6.1 6.2 4.8
Fiscal Balance (% of GDP) 0.2 0.6 -8.0 -5.8 -3.2
Public Debt (% of GDP) 74.1 70.6 82.9 82.3 78.4
Inflation (HICP, ann. var. %, eop) 1.7 1.8 1.0 3.8 10.5
Inflation (HICP, ann. var. %, aop) 2.1 1.5 1.4 2.8 8.6
ECB Refinancing Rate (%, eop) 0.00 0.00 0.00 0.00 2.50
ECB Overnight Deposit Rate (%, eop) -0.40 -0.50 -0.50 -0.50 2.00
3-Month EURIBOR (%, eop) -0.31 -0.38 -0.55 -0.57 2.13
10-Year Bond Yield (%, eop) 0.50 0.03 -0.43 0.09 3.20
Stock Market (var. of ATX %) -19.7 16.1 -12.8 38.9 -19.0
Exchange Rate (USD per EUR, eop) 1.14 1.12 1.22 1.14 1.07
Exchange Rate (USD per EUR, aop) 1.18 1.12 1.14 1.18 1.05
Current Account Balance (EUR bn) 3.5 9.5 11.3 1.4 3.1
Current Account Balance (% of GDP) 0.9 2.4 3.0 0.4 0.7
Merchandise Trade Balance (EUR bn) -6.0 -4.3 -1.9 -12.9 -20.6
Foreign Direct Investment (EUR bn) 4.6 4.4 -8.2 11.4 1.9

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