The recovery of the Austrian economy will gain pace with output expanding by 3.4% in 2021 and 4.2% in 2022. A rebound in global trade and generous government support underpin strong investment growth. Consumption will improve as households reduce their saving. Worldwide progress with the deployment of vaccines will allow the easing of travel restrictions and thus foster activity in hospitality sectors and employment in the second half of 2021. The increase in commodity prices will result in a moderate and temporary uptick in consumer price inflation. The fiscal deficit is planned to decline in 2021 and 2022.
COVID-19 risks reinforcing long-standing vulnerabilities in the labour market such as digital skill gaps, diverging career trajectories between men and women, an elevated rate of long-term unemployed and subpar integration of migrants. Addressing these issues is crucial for a more inclusive recovery, facing demographic change and the sustainability of social security systems.
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2021 Structural Reform Priorities
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.