Cyclical Stabilisation, But No Robust Upturn. Economic Outlook for 2010 and 2011

In 2009, economic activity in Austria contracted by 3.4 percent in volume, somewhat less than the euro area average (–3.9 percent). As from the middle of the year, merchandise exports and industrial output started heading up as a result of the expansionary policy stance adopted worldwide. The recovery is set to continue in the months to come, allowing GDP to grow by 1.5 percent in 2010. However, the still low capacity utilisation will hardly provide incentives for higher investment, which is one of the reasons why unemployment will keep rising, to a rate of 8.1 percent of the dependent labour force in 2011. The general government balance will deteriorate to a deficit corresponding to around 5 percent of GDP.