The scope of the European rating agency sees the reform needs in Austria. “In the long term, Austria must continue to consolidate to comply with the EU tax rules,” says an analysis of creditworthiness.
The prospects for the state finances “depend on how the new government will tackle the long existing problems of the country”. There are mainly reform needs for the pension system and the costs for health care and care.
Incentives for the required labor market
Scope also takes into account structural reforms that are necessary for the Austrian labor market. In this way, new incentives can be created for higher employment participation – especially women and the elderly. This could “increase the production potential and relieve the household”.
New government needs sensitivity
Creditworthiness assumes that the gross domestic product will grow by 0.5 percent this year. “The new government must carefully calibrate the budget consolidation in order not to suffocate economic recovery,” says the analysis. From 2026 to 2028, an average annual growth of approximately 1.2 percent will be predicted.
The right FPö and the conservative ÖVP have discussions about the formation of the government. In mid-January they presented a savings package of billion dollars to prevent an EU deficiency procedure. The parties want less costs and set the red pencil, especially with climate protection.
Scope evaluates Austria with the creditworthiness AA+ and a stable image. This certifies the country a “very strong credit quality”. However, the neighbors of Germany and Switzerland are rated even better: they have the coveted AAA rating, which gives buyers of government bonds an extremely low failure risk.
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.
