Austria 2025: EU economic cargo with alarming predictions!

Austria 2025: EU economic cargo with alarming predictions!

Österreich, Land - Austria remains the economic bottom of the European Union in 2025. A current report by the EU Commission predicts that the gross domestic product (GDP) will continue to shrink in the coming year. This represents the third decline in a row after a GDP decline of 1 percent and 1.2 percent already occurred in 2023 and 2024. Austria thus offers the worst result within the EU, such as 5min.at reports.

The causes of this economic misery are diverse. Low investments, reserved consumption and falling exports draw a worrying picture. In addition, international trade conflicts contribute to tightening the situation. Industrial production recorded a decline of over 5 percent in 2024, exports have dropped by almost 6 percent. The imports have decreased even more, which underlines the dependency of Austria on international trade.

forecasts and effects

For 2025, an unemployment rate of 5.3 percent is expected, which means an increase of 4.8 percent in 2022. A slight relaxation is forecast for 2026, with a decline in the unemployment rate to 5.2 percent. The demographic development must also be taken into account. The employable population shrinks, which leads to a slow growth of the job offer, especially due to longer working hours of women.

Inflation is estimated to be around 3 percent for 2025, which is primarily due to increased energy prices and the loss of relief. Here, too, the forecast for 2026 shows a positive development, with a decline in the inflation rate to about 2 percent, since falling energy prices and slowly increasing wages are expected.

budget deficit and debt rate

However, the financial challenges remain significant. The state budget is expected to have a deficit of around 4.4 percent of GDP, despite savings that have already been initiated. High costs for pensions, salaries and social benefits burden public finances. The state debt rate is expected to increase from 81.8 percent in 2024 to around 85.8 percent in 2026.

Overall, Austria remains an economic problem child within the EU. Economic stability is on the brink and urgent measures are needed to reverse this poor development. Further information on the economic indicators can be found on the official website of Eurostat.