Panorama econòmic

Economic indicators

The Austrian economy is deemed one of the most stable in Europe. The country relies on a very strong network of export-focused SMEs, excellent academic standards and significant spending for research and development. Nevertheless, the country experienced the second consecutive year of recession in 2024, with GDP contracting by an estimated 0.6% following a negative growth of 0.8% one year earlier (IMF). Over the year, Private consumption growth stagnated despite rising real wages, as high inflation eroded consumer confidence, prompting a sharp increase in the saving rate. Elevated interest rates and energy costs dampened investment, particularly in construction and industry. Residential construction declined by 18% between 2023 and 2024. Weak industrial growth and low corporate investment from key trading partners disproportionately impacted Austria’s industry, which specializes in intermediate goods and machinery for export. As per the IMF, growth is set to resume in 2025 (+1.1%) and 2026 (+1.7%). Private consumption is expected to recover as uncertainties subside, while investments are forecast to rebound, driven by rising demand from key trading partners, lower energy costs, and improved financing conditions.

The general government deficit rose from 2.6% of GDP in 2023 to 3.6% in 2024 (EU Commission), driven primarily by the inflation-linked indexation of public salaries, pensions, and social benefits, along with increased spending on childcare, healthcare, housing, and climate initiatives under the national fiscal framework. Furthermore, measures to mitigate high energy prices, such as the electricity price brake, were extended until the end of 2024. In 2025, the deficit is projected to rise to 3.7% of GDP due to higher pension and social benefit expenditures, before decreasing to 3.5% in 2026. Tax revenue growth is expected to moderate as inflation eases, with Austria’s expansionary fiscal stance in 2024 shifting to a broadly neutral position over the forecast period. Amid a combination of weaker nominal GDP growth and higher primary deficits, the debt-to-GDP ratio – estimated at 79.6% last year – is expected to follow an upward trajectory over the forecast horizon, rising to 83.3% by the end of 2026 (Fitch Ratings). Headline inflation dropped from 7.7% in 2023 to around 3% in 2024, driven by lower wholesale energy prices and easing price pressures on industrial goods and food. Services inflation remained persistent due to high wage growth. In 2025 and 2026, wage growth and services inflation are expected to decline, with headline inflation projected at 2.9% in 2024, 2.1% in 2025, and 1.7% in 2026 (EU Commission).

Austria has a low percentage of unemployment compared to other countries in the Eurozone and the EU, as well as global comparison. The prolonged recession moderately impacted the labour market, with the unemployment rate rising from 5.1% in 2023 to 5.6% in 2024. It is expected to remain stable in 2025 before falling in 2026 as the economy recovers (IMF). Retirement trends helped limit unemployment growth, though migration and the gradual alignment of women’s retirement age with men's maintained labour supply. Nominal wages rose by 7.5% in 2024 and are forecast to grow by 3.8% in 2025, supporting real wage growth. Overall, Austrians enjoy one of the highest GDP per capita (PPP) in Europe, estimated by the IMF at USD 61,080 in 2025.

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