The economic slump triggered by the COVID-19 crisis hit the Austrian provinces to varying degrees. This is mainly due to the extent to which individual sectors were affected by the crisis, as well as to differences in the regional economic structure.

A recently published ex-post analysis by WIFO economists Serguei Kaniovski, Atanas Pekanov and Thomas Url of the impact of government aid measures under the COVID-19 legislation allows conclusions on their effectiveness in bridging potential liquidity shortages due to falling sales.

Weekly economic activity according to WWWI remained at the pre-crisis level in calendar week 27 (5 to 11 July 2021), an average week in 2019 as a fixed reference period, according to preliminary calculations. Compared to the same week last year, GDP is currently 6.6 percent higher.

"Due to the absence of tourist inflows, the Tokyo Olympics are expected to have a considerably lower positive impact on the host region's economy," explained WIFO regional economist Matthias Firgo. In a paper recently published in the renowned journal "Regional Science and Urban Economics" Firgo investigated which causal effects Summer and Winter Olympics since the 1990s have had on the level of prosperity (GDP per capita) of the host regions on average.

In 2021 and 2022, a solid recovery of the Austrian economy is expected due to the strong international economy and a large rebound effect of domestic demand after the COVID-19 recession. This also feeds into the medium-term outlook and the Austrian economy is expected to grow by an annual average of 2.8 percent over the five-year period 2021 to 2025.

The global economic outlook has improved significantly since the last forecast. This also has consequences for the expected recovery in Austria. After the decline in the previous year (–6.3 percent), WIFO expects real GDP growth of 4 and 5 percent for 2021 and 2022, respectively.