Austria's economy: Despite savings packages, 2025 threatens to be record deficit!

Austria's economy: Despite savings packages, 2025 threatens to be record deficit!

The budget deficit in Austria is estimated for around 3.3 percent of gross domestic product (GDP) for the current year 2025, despite all austerity measures. This emerges from current business forecasts that reflect on the continuing challenges for the domestic economy. Experts emphasize that the deficit could also increase in the following year with 3.5 percent, which clearly sees the government's financial scope. Class = "Source_1"> 5min.at reports that the economy in Austria shrank by 1.2 percent in 2024, after a decrease of 1 percent in 2023.

The global economic framework also affects Austria sustainably. A decline in industrial production in the euro area has been burdening the mood since the beginning of 2023 and shows no signs of a trend reversal in surveys among industrial companies. In addition, the announced customs for customs export goods are available on EU export goods, which further put pressure on export-sensitive national economy. In these turbulent times, however, there are also apparent bright spots: the demand for construction and consumption are tended to increase.

economic expectations for 2025 and beyond

The forecasts of the WIFO (Austrian Institute for Economic Research) predict a decline in GDP by 0.3 percent for 2025, while an economic upswing in the EU is expected from mid -2025. However, this upswing could not be enough to achieve positive GDP growth in 2025. For 2026, on the other hand, growth of 1.2 percent is predicted. Kfw an increase in unemployment to 7.3 percent in 2025.

In parallel, inflation, which dropped to 2.9 percent in 2024, will increase again in early 2025 and average on an annual average. This development not only affects the purchasing power of households, but also the savings rate, which will decrease in the same year, which enables easy growth of consumption. The WIFO also shows that the structural investment activity in the first half of 2025 could go through the valley sole, which benefits the housing initiative from 2024 and could support the demand. DIW Berlin describes a similar stagnation in the German economy this year.

For the year 2026, a slow growth is expected for both the German and the Austrian economy, with the aim of stabilization after a long phase of the recession. The decline in greenhouse gas emissions in Austria will also progress slowly, with a minus of 1.8 percent in 2025, which is a slow decline compared to the previous year.