Austria: Fourth quarter GDP growth revised upwards
March 10, 2011
In the fourth quarter, GDP rose 0.8% over the previous quarter in seasonally adjusted terms. The revised reading was up from the 0.6% increase initially reported in the 14 February flash estimate but still represented a deceleration compared to the 1.1% expansion tallied in the third quarter. Compared to the same period the year before, GDP grew 2.7%, which was notch above the 2.6% expansion in Q3. The deceleration over the previous quarter was mainly the result of a weaker performance in the external sector. Exports of goods and services rose 1.2% in the fourth quarter (previously reported: +1.4% quarter-on-quarter), which was down from the 3.2% expansion witnessed in the third quarter. Simultaneously, imports increased 0.8% in the fourth quarter, well below the 2.7% expansion registered in the third. As a result, the contribution from net exports to overall economic growth deteriorated from 0.5 percentage points in the third quarter to 0.3 percentage points in the fourth quarter. On the domestic side, government consumption was revised to a 0.3% expansion (initially reported: +0.1% qoq), up from the previous quarter's 0.1% increase. Gross capital formation was revised in this second estimate, growing 2.8% over the previous quarter (previously reported: 1.2% qoq), slightly slower than the 3.0% expansion observed in Q3. In contrast, private consumption was slightly weaker than previously estimated, growing 0.2% over the previous quarter (previously reported: +0.3% qoq). In the full year 2010, the economy expanded 2.0%, which contrasted the 3.9% contraction observed in 2009. The Austrian Institute of Economic Research (WIFO) expects GDP growth to accelerate to 2.5% this year before slowing to 2.0% in 2012. Moreover, in its December economic outlook report, the Central Bank sees economic activity rising 2.1% this year. For 2012, monetary authorities see the economy expanding 2.3%.
Author: Ricardo Aceves, Senior Economist