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Economy and Finance

Economic forecast for Austria

The latest macroeconomic forecast for Austria.

Austria’s economy grew by 1.5% q-o-q in the first quarter of 2022, i.e. one percentage point slower than expected in the Spring Forecast. Since March, the economic sentiment indicator and expectations deteriorated considerably, mainly due to the headwinds from Russia’s war of aggression against Ukraine and disrupted supply chains. Consequently, growth is expected also to moderate over the rest of the forecast horizon.

Last update : Summer 2022 Economic Forecast (14/07/2022)

Indicators2020202120222023
GDP growth (%, yoy)-6,74,83,71,5
Inflation (%, yoy)1,42,87,44,4

On an annual basis, real GDP growth is forecast to reach 3.7% in 2022 and 1.5% in 2023. Growth is supported by the ongoing normalisation of services and tourism. On the labour market, labour shortages are becoming increasingly important and have started to restrain the growth momentum. Compared to the Spring Forecast, this is a slightly clouded outlook for both years, taking into account that growth in the first quarter of 2022 stood lower than the initial flash estimate (+1.5% instead of +2.5% q-o-q) and the expected further materialisation of downside risks.

Energy prices increased significantly following the Russian war of aggression against Ukraine, from an already elevated level. In 2022, energy inflation is expected to remain very high throughout the year. In addition, food prices increased considerably and are set to remain high over the course of the year. A delayed pass-through of higher producer prices is projected to keep inflation elevated over the forecast horizon. Overall, HICP inflation is expected to reach 7.4% in 2022 before gradually decreasing to 4.4% in 2023.