In Austria as well as in the entire European Union, the economy will grow much more slowly this year than originally assumed. That is the tenor of the EU Commission’s spring forecast presented yesterday, Monday. The Brussels authority corrected its forecast significantly downwards because of the Ukraine war and the associated rising energy prices.
Accordingly, the economy of the EU and the euro countries will grow by 2.7 percent this year – instead of the previously expected four percent. For the coming year, the EU Commission is assuming growth of 2.3 percent. In February, the forecast was still 2.8 percent for the EU and 2.7 percent for the euro countries.
The authorities are also less optimistic for Austria than at the beginning of the year: an increase in gross domestic product of 3.9 percent is expected for this year, which is 0.4 percentage points less than before.
After around two years of the coronavirus pandemic, economic growth in Austria will “continue to be supported by pent-up private consumption, the revival of tourism and the service sector”. However, the war is a “headwind for the Austrian export industry” and the dependence on Russian gas is a “downside risk”. For 2023, the authority expects an increase of 1.9 percent for Austria.
In terms of inflation in the euro zone, the forecast for the euro countries has almost doubled this year, from 3.5 to 6.1 percent on an annual average. In Austria, inflation is expected to be 6.0 percent this year, and it is expected to drop to 2.7 percent next year.
Source: Nachrichten
