Austria's Economy Will Only Expand Weakly in the Medium Term. Update of the Medium-term Forecast of the Austrian Economy 2024 to 2028

07.05.2024

Austria's Economy Will Only Expand Weakly in the Medium Term

Update of the Medium-term Forecast of the Austrian Economy 2024 to 2028

Boosted by the international upturn, the Austrian economy is slowly recovering from the recession in 2023 (–0.8 percent). WIFO expects real economic growth of 1¾ percent for 2025 and average GDP growth of 1¼ percent p.a. for 2024-2028 (Ø 2010-2019 +1.5 percent p.a.).

Demographic change will exacerbate the shortage of labour force in the forecast period. While this will dampen growth prospects, it will also curb unemployment: the unemployment rate is expected to fall to 5.7 percent by 2028 (6.7 percent in 2024).

The strong inflation observed since the end of 2021 (Ø 2022-23 +8¼ percent p.a.) will slow significantly in the forecast period (2024: 3.8 percent) and reach the ECB's 2 percent target in 2027. The deficit ratio averages just under 3 percent of nominal GDP in 2024-2028; government debt rises from 76½ percent to just over 78 percent of GDP.