Austria: GDP growth remains strong in Q2
September 25, 2017
According to detailed data released by the Austrian Institute of Economic Research (WIFO) on 25 September, the economy continued to grow strongly in Q2, coming in just below Q1’s six-year high. GDP increased a seasonally-adjusted 0.8% quarter-on-quarter, slightly below Q1’s similarly impressive expansion, which was upwardly revised to 0.9% (previously reported: +0.8% qoq), and in line with the first estimate released at the end of July. Compared to the same period last year, the economy grew 2.6% in Q2, which was below Q1’s 3.2% year-on-year rise.
Growth in Q2 was supported by still robust, if somewhat weaker, domestic demand growth and a strong net contribution from the external sector. Government consumption growth was stable at 0.2% qoq, while private consumption growth edged up a notch to 0.3% qoq (Q1: +0.2% qoq). Fixed investment slowed substantially, albeit from a high level—it was clocked at 0.9% qoq in Q2, down from 1.3% qoq in Q1.
On the external side of the economy, exports of goods and services rose a more moderate 1.8% (Q2: +2.1% qoq); growth in imports also decelerated (Q2: +1.6% qoq; Q1: +1.7% qoq). Nonetheless, the external sector once again made a positive contribution to GDP growth, evidence that Austria is taking full advantage of the upswing in the European economy that is currently underway.
Looking ahead, economic growth is expected to accelerate this year, thanks to a stronger global economic environment, which is fueling exports growth. The positive momentum is also reflected in buoyant business and consumer confidence, which point to robust household spending and fixed investment growth this year.
Author: Christopher Mc Innes, Economist