Austria in the crisis: Will the economy grow again in 2025?

Austria in the crisis: Will the economy grow again in 2025?

Austria is in a deep economic crisis: According to the current forecast of the WIFO, the economy will decrease by almost one percent in 2024. This worrying situation is additionally exacerbated by stagnating industries such as industry and construction industry, which continue to remain in the recession. The decline in economic output could only result in growth of 0.6 percent in 2025, followed by 1.2 percent in 2026, as Today.at

The unemployment rate is expected to increase to 7.4 percent in 2025; It is not until 2026 that a slight return to 7 percent was expected. Stefan Ederer, one of the authors of the forecast, warns that the return of the budget deficit to less than 3 percent of gross domestic product (GDP) could dampen the already weak economy, which would result in a new recession. The trust of consumers is already struck due to increasing energy prices at the beginning of the year, which further affects the reserved consumption expenditure of households, according to the analysis of the WiFo.

state financial situation and labor market

The budget deficit could increase in 2025 without further savings to over 4 percent of GDP. A drastic reduction in the deficit could dampen GDP growth by up to one percentage point. The reason for this is the current economic policy uncertainty that a new federal government confronts with the challenge of budget consolidation, the consequences of which are currently unforeseeable. In this tense context, the prognosis shows that both industry and construction industry are increasingly fighting with challenges and the "mostly pessimistic" corporate environment further difficult, as well as Fondsprofessell.at emphasized.