84
Austria Economic growth is projected to edge down over the 2020-21 period as the global slowdown and trade tensions weaken export growth and business investment. Employment will continue to increase and a tight labour market will support income growth. Domestic demand will be the key driver of growth. Inflation will remain subdued. Following an increase in pension entitlements, the budget balance will deteriorate slightly over 2019-21 with fiscal policy otherwise broadly neutral. The authorities should let the automatic stabilisers operate and consider more active measures to further stimulate long-term growth. The government should address the sluggish productivity performance in business sectors by promoting more competition in services. Growth has moderated As confidence of manufacturing firms has fallen sharply, business investment growth has slowed. The strong slowdown in major export markets has also reduced export growth. However, recent sentiment indicators suggest that the construction and service sectors remain resilient. Long-term unemployment is finally edging down. The tight labour market has supported wage growth and domestic demand.
Austria Labour market conditions continue to support private consumption Y-o-y % changes 2.4
Weak external demand is dragging down growth
% of labour force 7
← Private consumption
Export market of goods and services
Unemployment rate →
2.0
Y-o-y % changes 15 Exports of goods and services
6
1.6
5
1.2
4
0.8
3
0.4
2
0.0
1
12 9 6
-0.4
2011
2013
2015
2017
2019
2021
0
3 0 0
2011
2013
2015
2017
2019
2021
-3
Source: OECD Economic Outlook 106 database. StatLink 2 https://doi.org/10.1787/888934045012
OECD ECONOMIC OUTLOOK, VOLUME 2019 ISSUE 2: PRELIMINARY VERSION © OECD 2019