Following a slowdown of the Austrian economy in 2012, we forecast sluggish growth in the medium term. Over the next five years, real GDP growth will peak at a moderate annual rate of 2 percent in 2015, averaging an annual rate of 1.7 per¬cent. The main factors behind low real growth in the medium term are weak external demand (economic slowdown in the euro area) and weak domestic demand (modest consumption growth due to enhanced savings). Exports will expand by an annual average of 5.2 percent during 2012-2017. Imports to Austria are expected to increase by 4.8 percent per year. In spite of a positive trade balance, the contribution of net exports to the growth of aggregate demand will not induce any significant growth of real GDP in Austria. Investment into machinery and equipment is not expected to pick up until 2015, growing at an average annual rate of 3.9 over the forecasting period. Construction investment will increase at roughly 1 percent per year. The growth of private consumption will remain sluggish in the medium term, with the savings ratio rising to 8.7 percent of disposable income in 2017. Private consumption expenditure will expand at an average of 1.0 percent per year.