Restrained Economic Development in the Fourth Quarter of 2023

WIFO Flash Estimate
According to WIFO's latest flash estimate, the domestic economy stabilised at a low level at the end of the year: economic output expanded by 0.2 percent in real terms in the fourth quarter of 2023 compared to the previous quarter. While the first signs of a bottoming out can be seen in industry, developments in the service sectors were mixed. Consumer and investment demand remained subdued.

The downward trend in the domestic economy observed in the previous year was halted at the end of the year. According to preliminary estimates, domestic GDP expanded slightly in the fourth quarter of 2023: +0.2 percent in real terms compared to the previous quarter (key figure according to Eurostat standard). Economic momentum thus stabilised at the end of the year after two quarters of negative rates of change (second quarter of 2023 –1.1 percent, third quarter of 2023 –0.5 percent). In a year-on-year comparison, however, economic output was 1.3 percent below the fourth quarter of 2022.

The annual rate of change calculated for 2023 as a whole was therefore –0.7 percent.

After a weak phase lasting more than a year, the industrial economy showed the first signs of bottoming out. In the fourth quarter, value added in this sector (ÖNACE 2008, sections B to E) increased slightly by +0.4 percent compared to the previous quarter (third quarter –1.5 percent). In contrast, the construction industry once again recorded a decline (–1.0 percent, after –0.6 percent in the third quarter).

The picture in the services sector was mixed. While value added in trade, transport, accommodation and food service activities was 2.6 percent higher than in the previous quarter, it stagnated in the areas of information and communication, financial and insurance activities, real estate activities (NACE 2008, sections J to L) and fell by 1.9 percent in other business activities (NACE 2008, sections M to N).

On the demand side, economic momentum remained low for the most part. Consumer demand from private households stagnated, while demand from the public sector increased by 0.3 percent.

The picture in foreign trade was subdued. Exports fell by 0.2 percent and imports by 0.8 percent. Investment demand also remained weak. Gross fixed capital formation increased by 0.2 percent compared to the previous quarter.

Important information:

The WIFO flash estimate is a first estimate for the past quarter. It is based on the Quarterly National Accounts of Statistics Austria and includes GDP as well as components in the form of seasonally and working-day adjusted rates of change compared to the previous quarter (key figure according to Eurostat standard).

On 29 February 2024, Statistics Austria will publish quarterly GDP data and main aggregates for the fourth quarter of 2023 based on more complete data as well as the preliminary annual data for 2023.