WIFO predicts Austrian GDP will grow by just 0.2 percent in 2024
Anyone who has walked around Vienna recently can sense that the optimistic feeling usually present in the Austrian city isn’t appearing much right now.
Much of that is due to the Austrian economy still lagging behind most of Europe’s, as the country’s high inflation (in February still at 4.3 percent), high interest rates, and constantly increasing prices seem to be taking a toll.
Thus, it probably isn’t much of a surprise that the Austrian Institute of Economic Research (WIFO) came out late last month announcing they believe the Austrian economy will stagnate in 2024.
They expect this due to the EU’s continuing high interest rates along with the general downturn of the European economy.
That is also why the WIFO estimate the Austrian GDP in 2024 will only grown 0.2 percent.
Quite a bit below the 0.9 percent growth they initially predicted last December, and basically putting the country’s economy into stagnation.
Cost of living continues to rise in Austria in 2024
The Austrian economy stagnating in 2024 is not a surprise for many currently living in the Alpine country, as apartment rent continue to rise, utility prices increase, and everyday things including food become more and more expensive every month.
With the basic cost of living continuing to rise, many in Austria just don’t have the disposable economy they had before the current Austrian government shut down the country’s economy for the best part of two years, due to a virus with a 99.5 percent survival rate across most demographics.
The WIFO also added Austria’s economy is being affected negatively, just as it is in Germany, due to both European countries specializing in capital goods production (ie: machinery, buildings, equipment, vehicles, computers etc).
Due to the high interest rates in Europe, however, investment demand is less as is the demand for things like construction services.
We saw that with Austria’s GDP actually decreasing by 0.8 percent in 2023 compared to 2022, much of that caused by declining output from the country’s manufacturing, trade and transportation sectors.
As of early 2024, there is little sign that is changing.
Austrian GDP predicted to rise in 2025
With 2024 looking like it may just be a bust for the Austrian economy, the WIFO does have some positive predictions for 2025, however.
Although, of course, those predictions are just that. Predictions.
But they do say they expect Austria’s GDP to rise by 1.8 percent in 2025, with the foundations of that beginning when economic activity in the country begins to pick up mid-2024.
Let’s hope the WIFO is correct.