While in the USA, the cyclical recovery is ongoing, it has been absent so far in the euro area. The sizeable and simultaneous
retrenchment of government demand in several EU member countries, the rise in unemployment, restraint on bank lending and
sluggish global trade all weigh on activity in Europe. Key Austrian export markets are stagnating or in recession, dampening
the domestic investment climate. Lean real income gains and a rising saving ratio limit the scope for private consumption
growth. For the whole of 2013, GDP is expected to edge up by a modest 0.4 percent. With international trade picking up, demand
and output growth should accelerate to 1.6 percent in 2014.
Research group:Macroeconomics and European Economic Policy