May 31, 2017
According to detailed data released by the Austrian Institute of Economic Research (WIFO) on 31 May, the economy got off to a strong start in 2017 as it accelerated to a six-year high in Q1. GDP increased a seasonally-adjusted 0.7% from the previous quarter, slightly above Q4’s similarly-impressive 0.6% expansion and the 0.6% first estimate released in April. Compared to the same period last year, the economy grew 2.3% in Q1, which was above Q4’s 1.6% rise and the fastest pace of growth since Q3 2011.
Q1’s improvement came despite seemingly weaker growth in domestic demand. Private consumption growth slowed marginally to 0.4% (Q4 2016: +0.5% quarter-on-quarter), although it did remain robust. Government consumption growth was stable at 0.5%, but fixed investment slowed somewhat, despite supportive financing conditions and an improving global economic environment.
GDP growth was supported by the external sector, which made a strong contribution to GDP growth for the first time sinceQ2 2014. Exports of goods and services rose 2.4% (Q4: +0.3% qoq), a five-year high, and imports also accelerated considerably (Q1: +2.0%; Q1: +0.6 % qoq).
Looking ahead, economic growth is expected to accelerate this year, thanks to a stronger global economic environment, which is fueling the country’s exports growth. The positive growth momentum is also reflected in buoyant business and consumer confidence, which point to stronger household spending and fixed investment growth this year.
Author: Christopher Mc Innes, Economist