Austria: GDP contracts in fourth quarter
March 9, 2012
In the fourth quarter, GDP dropped a seasonally and working-day adjusted 0.1% over the previous quarter, according to revised data released by the Austrian Institute of Economic Research (WIFO) on 9 March. The reading, which confirmed the flash estimate released on 15 February, contrasted the 0.2% expansion recorded in the third quarter and marks the first quarterly decline seen since the second quarter of 2009. Compared to the same period the year before, GDP slowed from a 2.5% increase in the third quarter to a 1.2% expansion in the fourth. In the full year 2011, the economy grew 3.1%, faster than the 2.3% expansion recorded in 2010. The fourth quarter contraction was mainly the result of a deterioration in the external sector, while domestic demand remained stable. Private consumption expanded 0.3% over the previous quarter, up from the 0.2% increase tallied in the third quarter. On the other hand, government consumption decelerated from a 0.5% increase in Q3 to a mere 0.1% expansion in Q4. Meanwhile, gross fixed investment weakened somewhat, growing 0.7% in the final quarter of 2011 (Q3: +0.9% quarter-on-quarter). On a negative note, the external sector's net contribution to overall growth deteriorated, and shaved 0.4 percentage points off overall growth in the fourth quarter, down from a flat reading in the third. Exports of goods and services declined 0.4% over the previous quarter, which more than reversed the 0.3% increase recorded in the third quarter. Meanwhile, imports grew 0.3% in Q4, following an identical expansion in Q3. The Central Bank expects economic growth to pick up in the first and second quarters, with GDP increasing 0.2% and 0.3% respectively. For the full year, the Bank expects the economy to grow only 0.7% before accelerating to 1.6% in 2013.
Author: Ricardo Aceves, Senior Economist