Austria’s economy will shrink by 0.5 percent this year

In the spring, the European Commission expected growth of 0.4 percent. Austria’s inflation expectations have also worsened since the spring

The European Commission is revising its growth forecast for Austria significantly downward. According to the European Union’s autumn forecast presented in Brussels on Wednesday, the domestic economy will contract by 0.5 percent this year after adjusting prices. This is due to high energy prices, high unit labor costs and weak export growth. In the spring, the European Commission expected Austria’s GDP growth to increase by 0.4 percent in 2023.

Inflation expectations in Austria have also worsened since the spring – from 7.1 to 7.7 percent. Things look better in the next two years: in 2024, the domestic economy is expected to grow by 1.0 percent in real terms, with an inflation rate estimated at 4.1 percent. Growth is expected to be 1.3 percent and inflation 3.0 percent the following year.

Forecasts for 2023 call for growth of 0.6% for the Eurozone and the entire European Union. The inflation rate is expected to reach 5.6 percent (Eurozone) and 6.5 percent (European Union). The EU Commission expects the strongest growth this year in Malta at 4 percent, while the largest decline is likely to be in Estonia at 2.6 percent.

Austria is performing better than the EU average when it comes to unemployment: for 2023, the EU Commission expects this country to average 5.3 percent. The following year, this rate is expected to rise slightly to 5.4 percent, before falling again to 5.3 percent in 2025. The growth rate in Brussels is expected to reach 6.0 percent for the entire EU – for 2023 and 2024 . It is expected to decrease to only 5.9% in 2025. (APA)