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Austria: Economy contracts in Q3

December 9, 2014

The Austrian economy deteriorated more than expected in Q3, according to more complete data released by the Austrian Institute of Economic Research (WIFO) on 9 December. GDP adjusted for seasonal and working-day factors contracted 0.1% in Q3 over the previous period. The reading, which came in below the flat reading previously reported in a flash estimate and the 0.1% expansion registered in Q2, represented the first contraction in economic activity since Q3 2011.

According to the Institute, the quarterly deterioration stemmed mainly from a contraction in investment and exports. Gross fixed investment contracted 0.8% over the previous quarter in Q3, which followed the 0.3% fall observed in Q2. Meanwhile, growth in private and government consumption remained lackluster in Q3, rising 0.1% and 0.2%, respectively, over the previous quarter. Both readings kept the same pace observed in the previous quarter.

The external sector continued showing signs of deterioration. Exports of goods and services contracted 0.8% over the previous quarter, which followed the 0.4% decrease registered in Q2. Imports moderated from a 0.4% increase in Q2 to a 0.1% rise in Q3. The external sector’s net contribution for overall economic growth fell from minus 0.5 percentage points in Q2 to minus 0.6 percentage points in Q3.

Compared to the third quarter of 2013, GDP contracted 0.1% in Q3, which contrasted the 0.7% rise tallied in Q2.

In December, the Austrian National Bank (OeNB) revised its growth forecast. Following an estimated 0.4% expansion in 2014, the Central Bank expects the economy to increase only 0.7% in 2015 (previous estimate: 1.9%). For 2016, the Bank sees economic growth picking up to 1.6%. FocusEconomics panelists project the economy to grow 1.2% in 2015, which is down 0.1 percentage points from last month’s estimate. For 2016, panelists expect the economy to grow 1.9%.


Author:, Senior Economist

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Austria GDP Q3 2014 0

Note: Quarter-on-quarter changes of seasonally- and working-day adjusted GDP and year-on-year variation in %.
Source: Austrian Institute of Economic Research (WIFO) and FocusEconomics Consensus Forecast.


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