For this year, the organization only expects an increase in gross domestic product (GDP) of 3.6 percent, in December it was still expecting an increase of 4.6 percent. The forecast for 2023 is only 1.4 percent, after 2.5 percent in December, the OECD announced on Wednesday. The strongest driver of growth is private consumption. However, increased uncertainty, higher energy prices, labor market shortages and supply chain disruptions could weigh on investment and export growth, the OECD writes. For this year, the organization expects annual inflation of 6.7 percent in Austria. In the coming year 2023, however, this development is likely to level off to 4.7 percent. However, wage negotiations could put more pressure on prices this year and next year.
The shortage of well-trained workers or a flare-up of the pandemic with associated health measures in autumn could also hamper growth this year. In addition, disruptions in the gas supply would also have a negative impact on the growth forecast, as gas imports from Russia could not be replaced in the short term. Austria is still heavily dependent on Russian gas. Before the start of the Ukraine war, around 80 percent of gas consumption was imported from Russia. Dependence on Russian oil, on the other hand, is rather low; according to the OECD, only 8 percent of crude oil imports to Austria come from Russia.
OECD expects budget surplus in 2024
However, the OECD expects the budget to be tightened again, and the support measures that are due to expire in connection with the pandemic in particular should support the development. For 2024, the organization even expects a budget surplus again. The eco-social tax reform is also an important step towards a greener economy. The OECD writes that the government must act more on the way to net-zero emissions by 2040 and to improve energy security.
The OECD is also assuming that global growth in 2022 will be significantly less strong than it had assumed at the end of the previous year. The organization expects growth of 3.0 percent this year and 2.8 percent next year. In December of the previous year, the OECD had forecast growth of 4.5 percent for 2022 and 3.2 percent for 2023.
Source: Nachrichten
