Revision Finds Consumption Gives Less Boost to the Economy

Business in the European Union is visibly picking up, carried along by the demand for exports, whereas domestic demand (including from private households) remains muted. Disposable income is growing at a sluggish rate only and the propensity to save continues to be high. As a stabilising factor in a recession, consumption no longer plays its former important role in the euro area. In Austria, private consumption grew modestly in the first half of 2004, according to preliminary WIFO calculations. Growth should accelerate in the second half of the year so that Christmas sales can be expected to benefit.