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Austria GDP Q2 2023

Austria: Economy records sharpest contraction since Q4 2021 in the second quarter

GDP contracted 0.4% on a seasonally adjusted quarter-on-quarter basis in the second quarter, contrasting the 0.1% expansion recorded in the first quarter. Q2’s reading marked the worst reading since Q4 2021, and was in contrast to the expansion recorded for the Euro area as a whole. On an annual basis, economic activity contracted 0.3% in Q2, contrasting the previous period’s 1.8% growth. Q2’s reading marked the sharpest decrease since Q1 2021.

The quarter-on-quarter downturn was driven by weakening private consumption, fixed investment and exports. Household spending contracted 1.5% in Q2 (Q1: +0.4% s.a. qoq). Fixed investment contracted 2.1% in Q2 (Q1: -1.5% s.a. qoq). Meanwhile, government spending rebounded, growing 0.9% in Q2 (Q1: -2.7% s.a. qoq).

Exports of goods and services growth softened to 0.6% in Q2 (Q1: +0.9% s.a. qoq). In addition, imports of goods and services deteriorated, contracting 1.1% in Q2 (Q1: +1.9% s.a. qoq).

On the economic outlook, Margarita Grushanina, analysts at Erste Bank, commented:

“This decline in economic dynamics has been anticipated and we expect it to continue in summer as high inflation and global uncertainty dampen consumption and investments. From autumn onwards, an improvement in foreign trade and a reduction in inflationary pressure and thus improvement in real income should favor economic growth again.”

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