Austria: Economic growth wanes somewhat in first quarter
May 16, 2014
According to preliminary data released by the Austrian Institute of Economic Research (WIFO), GDP increased a seasonally and working-day adjusted 0.3% over the previous period in Q1. The reading came in slightly below the 0.4% expansion recorded in Q4. Compared to the same period last year, GDP decelerated from a 1.3% increase in Q4 to a 0.4% expansion in Q1.
According to WIFO, although domestic demand is still expanding, growth is sluggish. The preliminary result showed that growth in private consumption kept the same pace that was observed in the final quarter of 2013 (Q1: +0.1 quarter-on-quarter; Q4: +0.1 qoq). Government spending increased 0.4% over the previous period, up slightly from the 0.3% expansion registered in Q4. Meanwhile, gross fixed investment swung from a 0.2% contraction in Q4 to a 0.1% expansion in Q1.
On the external front, exports of goods and services accelerated from a 1.3% increase in Q4 to a 1.5% expansion in Q1. Imports grew 1.1% in Q1, which was above the 0.7% growth registered in the previous quarter. Consequently, the external sector's net contribution to overall economic growth inched down from 0.4 percentage points in Q4 to 0.3 percentage points in Q1.
The Austrian National Bank (OeNB) expects the economy to grow 1.6% in 2014. For 2015, the OeNB sees economic growth picking up to 1.9%. FocusEconomics panelists project that the economy will grow 1.5% in 2014, which is unchanged from last month's estimate. For 2015, panelists expect the economy to grow 1.8%.
Author: Ricardo Aceves, Senior Economist