Austria: First quarter GDP growth revised down slightly
June 10, 2011
In the first quarter, GDP rose a seasonally adjusted 0.9% over the previous quarter, according to revised estimates by the Austrian Institute of Economic Research (WIFO). The amended reading was down from both the previous 1.0% estimate initially reported in the 13 May release and the fourth quarter's 1.0% expansion. Compared to the same quarter last year, GDP accelerated from 3.2% growth in the fourth quarter to a 4.2% expansion in the first, the fastest pace since Q2 2007. The first quarter result mainly reflected downside revisions to investment and in the external sector. Gross fixed capital formation increased 0.8% over the previous quarter (initially estimated: +0.9% quarter-on-quarter), slower than the 1.3% expansion observed in the fourth quarter. That said, private consumption and government consumption were not revised. Private consumption grew 0.2% in Q1, maintaining the pace observed in Q4, while government consumption remained flat, contrasting a 0.1% drop in Q4. On the external side, exports of goods and services grew 2.6% in the first quarter (initially reported: +3.4% qoq), faster than the 1.6% increase registered in the fourth quarter. Simultaneously, imports increased 1.7% (initially reported: +2.4% qoq), a notch above the 1.6% expansion observed in the fourth quarter. As a result, the contribution from net exports to overall economic growth improved from 0.1 percentage points in the fourth quarter to 0.7 percentage points in the first. The Austrian Institute of Economic Research (WIFO) expects economic growth to accelerate from 2.1% in 2010 to 2.5% this year before slowing to 2.0% in 2012. Moreover, in its June economic outlook report, the Central Bank revised its growth estimates and now expects economic activity to rise 3.2% this year, up from its previous 2.1%. For 2012, monetary authorities maintained their previous projections and see the economy expanding 2.3%.
Author: Ricardo Aceves, Senior Economist