Austria: Economic activity slows in second quarter
August 14, 2012
In the second quarter, GDP increased a seasonally and working-day adjusted 0.2% over the previous quarter, according to a preliminary flash estimate published by the Austrian Institute of Economic Research (WIFO) on 14 August. The reading followed the revised 0.5% growth rate observed in the first quarter (previously reported: +0.3% quarter-on-quarter) and was just in line with last month's FocusEconomics Consensus Forecast. Compared to the same period a year ago, the economy also grew 0.2% in Q2, which marked a notable deceleration compared to the 2.0% expansion recorded in Q1. According to WIFO, growth in private consumption was flat in the second quarter (Q1: +0.2% qoq), while government spending increased 0.5% (Q1: +0.6% qoq). Meanwhile, fixed investment expanded 0.4% in Q2, slightly faster than the 0.3% increase tallied in Q1. On the external front, exports of goods and services grew 0.5% in the April-June period, up from the 0.4% expansion observed in the three-month period to March. Imports swung from a 0.1% contraction in Q1 to a 0.6% expansion in Q2. As a result, the external sector's net contribution to overall economic growth was zero in Q2, a deterioration compared to the 0.3 percentage-point contribution recorded in Q1. In its latest bi-annual economic outlook report from June, the Central Bank expects the economy to expand 0.9% this year. For 2013, the Bank sees economic growth picking up to 1.7%.
Author: Ricardo Aceves, Senior Economist