Following the rather sluggish economic growth during the last years, demand and output growth in Austria is expected to accelerate
in 2017. In the current year, GDP growth should attain 2 percent followed by an annual average 1.7 percent till 2021, which
is broadly in line with the euro area average. Stronger activity will allow employment to expand by 1.6 percent in 2017 and
by an average 1.3 percent p.a. over the forecast horizon. With labour supply growth temporarily abating, the unemployment
rate should stabilise at 8.9 percent of the dependent labour force (national definition). After 2019, the jobless rate is
likely to head up again, reaching 9.1 percent by 2021. Consumer price inflation should remain subdued over the entire period,
at an annual rate of 1.8 percent, thereby significantly narrowing the inflation differential vis-à-vis the euro area. In view
of the projected cyclical fluctuations and the underlying policy assumptions, general government finances are projected to
balance, both in nominal (Maastricht) and structural terms by the end of the forecast period. General government debt, as
percent of nominal GDP, is projected to head down as from 2016, by a total 12 percentage points to below 72 percent by 2021.
Keywords:Medium-term forecast, economic growth, government finances, Austria
Forschungsbereich:Makroökonomie und öffentliche Finanzen