Strong Growth in 2007, Sizeable Cyclical Risks for 2008. Economic Outlook for 2007 and 2008

  • Markus Marterbauer

GDP in Austria is growing by 3.4 percent in volume this year, ¾ percentage point above the euro area average. Strong business activity is driven by exports and has meanwhile extended to construction and equipment investment. The swift expansion of demand and output is accelerating the growth of employment and of government revenues. Yet, the impact on private household consumption remains muted. The crisis on international financial markets, whose repercussions cannot be fully assessed as yet, will also exert a dampening effect. For 2008, GDP growth is expected to moderate to a rate of 2.4 percent in real terms, close to the long-term average.