Austria: Economic growth stalls in Q3
October 30, 2014
Economic activity in Austria continued to lose momentum, according to a preliminary estimate released by the Austrian Institute of Economic Research (WIFO) on 30 October. GDP growth adjusted for seasonal and working-day factors in Q3 was flat over the previous quarter. The reading came in below the revised 0.1% expansion registered in Q2 (previously reporter: +0.2% quarter-on-quarter) and marked the slowest pace since Q3 2012.
According to WIFO, the lackluster reading was mainly the result of a sharp deterioration in fixed investment (Q3: -1.1% qoq; Q2: -0.5% qoq), which more than compensated for a small improvement in private consumption (Q3: +0.2% qoq; Q2: +0.1% qoq). Meanwhile, growth in government spending maintained the pace observed in the previous quarter (Q3: +0.2% qoq).
The external sector continued showing signs of deterioration. Exports of goods and services contracted 1.3% over the previous quarter, which followed the 0.5% decrease registered in Q2. Imports swung from a flat print in Q2 to a 0.4% drop in Q3, which marked the fastest contraction since Q2 2009. The external sector’s net contribution for overall economic growth fell from minus 0.3 percentage points in Q2 to minus 0.6 percentage points in Q3.
Compared to the third quarter of 2013, GDP increased 0.2% in Q3, which was weaker than the 0.6% rise tallied in Q2.
Author: Ricardo Aceves, Senior Economist