Austria: Economy contracts in fourth quarter
February 15, 2012
In the fourth quarter, GDP contracted a seasonally and working-day adjusted 0.1% over the previous quarter, according to a preliminary estimate released by the Austrian Institute of Economic Research (WIFO) on 15 February. The reading contrasted the revised 0.2% expansion recorded in the third quarter (initially reported: +0.3% quarter-on-quarter). Compared to the same period the year before, GDP decelerated from a 2.5% increase in Q3 to a 1.2% expansion in Q4. The fourth quarter contraction was mainly the result of a deterioration in the external sector. Exports of goods and services contracted 0.5% over the previous quarter, which more than doubled the 0.2% decline observed in the third quarter. Imports swung from a 0.2% expansion in Q3 to a 0.1% contraction in Q4. Meanwhile, total consumption decelerated due to a slowdown in both private consumption (Q3: +0.3% qoq; Q4: +0.2% qoq) as well as government consumption (Q3: +0.4% qoq; Q4: +0.1% qoq). Gross fixed invested also slowed down and grew 0.6% in Q4, down from the 1.0% rise in Q3. According to WIFO, the economy grew 3.1% in the full year 2011, beating the 2.3% expansion recorded in 2010. The annual reading marked the strongest growth rate since 2007. However, WIFO recently stated that prospects for future economic development are less favourable. Accordingly, the Institute expects GDP growth to slow to 0.4% this year before accelerating again to 1.6% in 2013. For its part, the Central Bank sees economic activity growing 0.7% this year in its December Macroeconomic Report. For 2013, monetary authorities expect the economy to expand 1.6%.
Author: Ricardo Aceves, Senior Economist