Austria: GDP falls in Q3
According to a preliminary reading, GDP contracted 0.6% on a seasonally adjusted quarter-on-quarter basis in the third quarter, above the 0.8% contraction recorded in the second quarter. On an annual basis, economic activity declined 1.2% in Q3, below the previous quarter’s 1.1% decrease.
Household spending contracted 1.0% in Q3, marking the steepest decline since Q4 2021 (Q2: -0.3% s.a. qoq). Public consumption deteriorated, contracting 1.3% in Q3 (Q2: +1.5% s.a. qoq). Meanwhile, fixed investment fell at a slower rate of 0.4% in Q3, from the 2.4% decrease recorded in the previous quarter.
Looking at the external front, exports of goods and services growth hit an over one-year high of 2.4% in the third quarter, rebounding from the second quarter’s 2.4% contraction. In addition, imports of goods and services bounced back, growing 2.5% in Q3 (Q2: -1.0% s.a. qoq), marking the best performance in a year.
On the outlook for next year, analysts at EIU commented:
“There is little reason for optimism in 2024, as the main drivers of growth are all likely to remain depressed. Monetary policy, both in Europe and in other major economies, will remain tight until the second half of next year, which will hamper credit growth (affecting both household spending and business investment). A poor performance in Germany will affect Austria’s manufacturing exports (as the Austrian and German industrial sectors are closely integrated)”.