The Austrian economy shrank by 2.8 percent in real terms in the first quarter of 2009 compared with the previous quarter, after a 0.4 percent drop in the fourth quarter of the previous year. Global trade continued to plummet in the first quarter, which strongly affected Austrian exports. As a result, investment also fell sharply. Private consumption, on the other hand, remained steady. The short-time-work programs have only been able to alleviate the deteriorating situation in the labour market. Confidence indicators and some special factors point to an easing of the downward trend of the global economy in the second quarter. In Austria, the income tax reform and the car-scrapping premium should provide additional stimulus to private consumption.