Economics Department

Economic survey of Austria 2007: Executive summary

 

Contents | How to obtain this publication | Additional information

The following is the Executive summary of the OECD assessment and recommendations, taken from the Economic survey of Austria, published on 13 July 2007.

Contents                                                                                                                           

Austria occupies a place among the top performing economies. Eastern enlargement of the European Union has provided a boost for the economy, and Austria is among the largest investors in neighbouring EU member countries as well as in south-eastern Europe. Living standards and overall employment rates are high while the risk-of-poverty rate is low. The very open Austrian economy is also benefiting well from the current European recovery.

However, some structural indicators signal concerns: some groups suffer from low employment rates; both output and employment in domestic service sectors are relatively low; and total factor productivity growth has been flat while accelerating in comparable countries.

To maintain its high living standard while containing the costs of an already expensive social security system, Austria must focus on strengthening framework conditions for growth and employment in general and seize every opportunity to improve incentives for higher labour utilisation and to promote innovation and competition. To this end, this Survey is making recommendations in the following areas:

  • Increasing competition in services. Reforming the regulatory framework in domestic service
    sectors along the lines of recommendations in earlier Surveys to make it more conducive to competition and innovation, while ensuring cost efficiency of the considerable increase in spending for priority areas.
  • Removing obstacles to participation. Prevailing fiscal incentives for older workers and women
    with small children to withdraw from the labour market should be replaced by policies which avoid inactivity traps. Family benefits should be redirected to provide better and easier access to childcare services. Young migrants, as well as other labour market entrants from disadvantaged backgrounds, would benefit from making the Austrian education system less fragmented.
  • Encouraging regional agglomeration gains. Agglomeration is an important driver for growth. Austria, together with its neighbouring countries, could reap more benefits from regional integration by moving faster to adjust the regulatory and administrative framework and develop infrastructure to meet the needs of an emerging transnational agglomeration around Vienna.
  • Strengthening the fiscal policy framework. Austria’s fiscal position is not far away from sustainability although spending pressures are looming. However, expenditure savings will likely
    be needed to create room for the next tax reform, and the budgetary framework and fiscal federal
    relations should be reformed to improve public finance management. Introduction of output-based
    budgeting and a medium-term budgeting framework are important in this context.

How to obtain this publication                                                                                      

The Policy Brief (pdf format) can be downloaded in English. 

The complete edition of the Economic survey of Austria 2007 is available from:

Additional information                                                                                                  

 

For further information please contact the Austria Desk at the OECD Economics Department at eco.survey@oecd.org.  The OECD Secretariat's report was prepared by Rauf Gonenc and Rina Bhattacharya under the supervision of Andreas Wörgötter.

 

 

 

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