Energy Prices Only Briefly Slow Down Austria's Economy

The Austrian economy grew more strongly last year than assumed in the WIFO spring forecast of April 2026, resulting in a more favourable starting position for the current year. However, the war in Iran is taking its toll. Inflation has risen significantly, and sentiment has deteriorated. As energy prices fall, economic activity will regain momentum from the second half of the year onwards. Austria’s economy is expected to grow by around 1 percent in both 2026 and 2027. Average annual inflation will stand at 3.2 percent in 2026 and decrease to 2.4 percent in 2027. The unemployment rate will rise slightly in the current year and fall to 7.3 percent in 2027.