Economic researchers at Wifo and IHS have revised their economic forecast significantly downwards from the June estimate and now expect the second year of recession in a row. The weakening economy is causing unemployment to rise.
Both institutes expect a decline in real economic production of 0.6 percent this year; the summer forecast had expected zero or plus 0.3 percent. In addition, the forecast for the budget deficit in 2024 was significantly increased to 3.7 to 3.5 percent of GDP.
Last year, real gross domestic product (GDP) shrank by one percent. For 2025, the Economic Research Institute (Wifo) and the Institute for Advanced Studies (IHS) expect stimulus measures from abroad and rising consumer spending. Domestic GDP is then expected to grow by one percent or 0.8 percent.
Above all, declining business development in industry and construction and weak consumption will weigh on economic development in Austria in 2024. Higher spending and weaker tax revenue growth mean the government’s budget deficit continues to rise.
After the record inflation years of 2022 and 2023 of 8.6 percent and 7.8 percent, inflation in this country is expected to be significantly lower this year at 3.1 and three percent respectively. In the coming year, economic researchers expect consumer prices to rise by 2.2 to 2.4 percent.
Unemployment is rising
Wifo and IHS assume an equally high increase in unemployment. The unemployment rate is expected to rise from 6.4 percent in 2023 to seven percent this year and 7.2 percent next year.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
