Austria: Economy continues to recover in the first quarter
May 13, 2011
In the first quarter, GDP rose a seasonally and working day adjusted 1.0% over the previous quarter, according to a preliminary flash estimate released by the Austrian Institute of Economic Research (WIFO) on 13 May. The expansion virtually matched the revised 0.9% increase observed in the fourth quarter of 2010 (previously reported: +0.8% quarter-on-quarter). A year-on-year comparison points to an even stronger recovery, as GDP growth increased 4.2% in the first quarter, faster than the revised 3.0% year-on-year expansion observed in the final quarter of 2010 (previously reported: +2.7% yoy). According to WIFO, the first quarter reading was mainly the result of an improvement in the external sector, as exports outpaced imports. Exports of goods and services accelerated from a 2.0% expansion in Q4 to a 3.4% increase in Q1, while imports expanded 2.4% (Q4: +2.1% quarter-on-quarter). Moreover, private consumption grew 0.2% in the first quarter, matching the pace observed in the previous quarter, while government consumption remained unchanged over the previous quarter, contrasting a 0.1% contraction in the final quarter of 2010. Only fixed investment slowed over the previous quarter, increasing 0.9% in the January-March period, below the previous quarter's 1.2% increase. At the sector level, the quarterly improvement reflected strong expansions in the industrial sector, as well as in commerce, transportation and communication. In contrast, construction contracted over the previous quarter. The Austrian Institute of Economic Research (WIFO) expects GDP growth to accelerate from 2.1% in 2010 to 2.5% this year before slowing to 2.0% in 2012.
Author: Ricardo Aceves, Senior Economist