The economy is gaining strength, underpinned by private consumption and the recovery of investment and exports. Fiscal policy will remain slightly expansionary. Employment creation remains strong and unemployment is set to decline for the first time since 2011. Consumer price inflation remains higher than in other euro area countries.
Growth, incomes and well-being could be further enhanced by deeper structural reforms to simplify the administrative procedures to start a business, reduce entry barriers to retail and professional services, diversify financing options for start-ups, and reduce the costs of insolvency. Complex fiscal-federal relations and overlaps undermine the efficiency of public spending and limit the room for investment for the future.
The integration of Central and Eastern European countries into the European Union has benefited Austria more than other countries, but it also magnifies the challenges arising from globalisation. Early gains on the back of participation in global value chains and profitable banking sector expansion have reversed following the financial crisis. Implementing the government’s “Digital Roadmap” will help firms keep up with international best practices in the digital era.
Economic Survey of Austria (survey page)