Austria's economy 2025: Hope for slow growth!

Austria's economy 2025: Hope for slow growth!

The forecasts of the Organization for Economic Cooperation and Development (OECD) for the Austrian economy are mixed. According to a current report, the economy is expected to shrink by 0.5 percent in 2024. These gloomy prospects were announced on Wednesday, with the OECD at the same time recovering for 2025: growth of gross domestic product (GDP) by 1.1 percent is to be expected, followed by an increase of 1.4 percent in 2026. In comparison, the G-20 countries should have a significantly higher growth of 3.3 percent in the coming year, as Südtirol News reported.

Although the economic trend reversal is indicated, there are also worrying factors. The wifo and IHS institutes have recently given a cautious estimate and expect less growth of 1.0 or 0.8 percent for 2025. The inflationary tendencies also remain a hot topic that, according to OECD 2025, should fall near the ECB target value of 2.0 percent again. However, it is also expected that unemployment will increase and the overall investment activity will remain rather limited, especially in the cravilating industry.

structural challenges in view

The OECD also warns of structural challenges that the country has to do to manage future economic shocks. This also includes adapting the framework conditions for freelancers and creating better incentives for women to make it easier to enter the labor market. These findings illustrate the need for further reforms to strengthen economic power and corporate dynamics in Austria. The shadow of the weakening neighbor Germany, whose economy only expects growth of 0.7 percent in 2025, is an additional alarm sign for Austria and clearly shows the urgency of reforms.