Economic growth is projected to edge down over the 2020-21 period as the global slowdown and trade tensions weaken export growth and business investment. Employment will continue to increase and a tight labour market will support income growth. Domestic demand will be the key driver of growth. Inflation will remain subdued.
Reducing marginal tax rates, eliminating pathways to early retirement and expanding the supply of full-day early childhood institutions would contribute to moving further towards equal participation in the labour market. Enhancing competition in the service sector would strengthen productivity growth.
The Austrian economy has performed well over the recent decades. Real GDP per capita was the 11th highest in the OECD and 6th highest in the EU in 2018, slightly ahead of Germany, Finland and Belgium. It fell however behind the most rapidly growing OECD countries in the 2010s and the gap has widened more rapidly than in comparable countries. Available indicators of well-being remain nonetheless well above OECD averages, with limited discrepancy between population groups and regions, witnessing a high degree of social cohesion.