Austria's economy: Light at the end of the tunnel despite the recession!

Austria's economy: Light at the end of the tunnel despite the recession!

Austria's economy is at a crucial turning point. According to Rudolf Krickl, the head of the PWC Steuberatung in Vienna, there is initially a third year of the recession, but there is light at the end of the tunnel. Krickl is optimistic and sees the economic impulses, which emerges from the new government program and the planned infrastructure investments in Germany, as decisive factors for an upcoming upswing. With a 500 billion euro infrastructure program, Germany could act as an engine for the entire European economic growth, which would also benefit Austria, reports krone.at

a strong upswing in sight

While Krickl recognizes the challenges of economic stagnation, he believes that positive growth can be expected towards the end of 2025, provided that the government's new measures are being implemented consistently. The planned reduction in non-wage costs and a flat tax of 25 percent for working pensioners could create crucial incentives to combat the shortage of skilled workers and bring more working hours back to the labor market. The research premium, which is anchored in the government program, could also strengthen Austria as a hotspot for international scientists, which promises additional jobs and value creation.

However, economic growth continues to depend on inflation development and the pressure situation in the markets, as well as trend.at analyzed. A decline caused by offer shock could increase the risk of a stagflation, while a demand situation could be stabilized despite increasing prices due to interest increases. Economists warn that it is essential to bring supply and demand into balance in order to successfully get out of the recession. As long as the inflation rates remain moderate and do not hit the total inflation expectations, the market remains optimistic. In the forecasts of the ECB for 2023, an improvement in inflation expectations is already indicated.