International Economic Slowdown Hits Austria Hard

The Austrian Economy in 2023

In addition to the easing of the energy crisis, geopolitical turmoil continued to shape global economic developments in 2023. Economic activity was heterogeneous from region to region. Among the industrialised countries, the USA recorded strong economic growth. Western European countries, on the other hand, were weak, with some even slipping into recession. This also applies to Austria, with value added falling in manufacturing and some service sectors. Inflation weighed on household purchasing power, leading to a decline in consumer demand. As a result of the rise in consumer prices, gross wages and salaries stagnated in real terms, while net wages and salaries per capita are likely to have risen slightly as a result of government support measures. At 7.8 percent, inflation remained very high by historical standards for the second year in a row.