Now it’s official: Austria is the problem child in Europe when it comes to the economy. While the EU economy is growing this year, it is shrinking here. We will also be far behind in comparison next year.
The Austrian economy is falling further behind: while gross domestic product (GDP) will grow by 0.9 percent across the EU this year, it will shrink by 0.6 percent in Austria. That puts us near the bottom. Only in Estonia is economic production falling even more sharply than here, by minus one percent (see graph with selected countries). The economic research institutes Wifo and IHS also assume that the domestic economy will shrink this year.
According to the EU economic forecast, Malta is the absolute leader with a growth of five percent in 2024. GDP will grow by 3.6 percent in Croatia and by three percent in Spain and Poland. In the Czech Republic this is plus one percent, in Italy plus 0.7 percent and in Hungary plus 0.6 percent.
Minus is six times higher than in Germany
However, economists are concerned about Europe’s largest economy, Germany. Economic production there is expected to decline by 0.1 percent this year. In Austria, however, the minus is probably six times as high.
According to the forecast, we will also lag behind other countries in the coming year: while the economy across the EU is expected to grow by 1.5 percent, experts estimate that the increase in Austria will be just one percent, meaning that we are once again almost are at the bottom.
Inflation is falling
However, there is relief on the price front: inflation here will fall to 2.9 percent this year, which is only slightly above the European average of 2.4 percent. In 2025, domestic inflation should be only 2.1 percent – exactly the same as in the EU. In 2026, inflation in Austria is expected to reach just 1.7 percent, which would mean the European Central Bank’s target of staying below two percent would be achieved.
Of course, the forecasts for the next two years are still subject to uncertainty. It is unclear how Donald Trump’s second presidential term in the US, which starts on January 20, will affect the global economy. For example, new tariffs could have serious consequences for global trade.
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.
