Domestic economy – per capita income falls: Wifo revises forecast

“It looks like we will have to adjust it downwards, but there should still be some growth,” Felbermayr said on “ZiB 2” on Sunday. Even for Germany, which is “even more affected than Austria”, the German government predicts growth of 0.2 percent. “We will probably settle between this minimum value and what we had in December.”

Per capita income is declining
But because the population is growing, per capita income is declining, with GDP growth of 0.2 percent. “That is certainly not good for the people in the country, for the economy as a whole.” Felbermayr is hopeful of the government’s construction package and would like to see a reduction in indirect labor costs. When it comes to network costs as a price driver for electricity costs, we need to “take the pressure off”.

“Not surprising” for Kocher
For Minister of Economic Affairs Martin Kocher (ÖVP), the announced revision of the domestic GDP forecast for 2024 by Wifo is “not surprising”. In mid-February, the European Commission had already cut Austria’s growth prospects for the current year to 0.6 percent, Kocher said Monday morning at the Business Journalists’ Club in Vienna. Kocher expects stronger growth in this country in 2025, when the economy in Germany and thus Austria’s most important export market picks up again. It involves a ‘small shift’ in growth from this year to next year.

To support positive economic development in Austria in the medium and long term, Kocher sees three main areas of action: According to the Minister of Economic Affairs, expenditure on research and development (R&D) in this country must be noticeably increased. When it comes to R&D investments relative to GDP, Austria ranks third in Europe after Belgium and Sweden and the target is first place. Moreover, one must “do everything to utilize the potential in the labor market,” according to Kocher. .

There is still ‘extreme potential’ in people approaching retirement, in employment for women, in hourly wage increases for part-time workers, the unemployed and in immigration. These groups of people have not been the focus of labor market policy over the past fifteen years because there has ‘always been an oversupply’ of workers.

The Minister of Economic Affairs positively assesses the European Commission’s plan announced last year to abolish 25 percent of reporting requirements for companies to make the EU more competitive. “I think this is very important.” Many companies are “at their limits” due to a large number of new rules and laws.

Criticism from the SPÖ and FPÖ
On the occasion of the 2024 growth review announced by Wifo, the SPÖ and FPÖ sharply criticized the economic policies of the turquoise-green federal government. The government has refused to do anything about record inflation for more than two years – the population and businesses are paying the price every day in record prices, and the economy as a whole in the form of unrealized growth and inflation. prosperity,” SPÖ economist spokesman Christoph Matznetter said in a broadcast. “The best economic and social policy would still be one that lowers prices and fights inflation.”

According to Axel Kassegger, spokesperson for the FPÖ economy, “the ÖVP and the Greens are constantly trying to suggest to the population that the development of our economy is positive and on the rise.” This is “regularly refuted by economic experts with their naked figures and facts”. The government is “incapable of taking efficient economic policy measures to stabilize the Austrian economy in the long term and, above all, to make it competitive again,” Kassegger said.