Austria 2025 – Austria's Competitiveness and Export Potentials in Selected Markets

Given the strong focus of Austria's trade relations on the Single European Market, this study analyses the trade potential for Austrian exporters in 55 selected economies outside the EU and EFTA. Specifically, the study examines the macroeconomic environment and medium-term growth prospects of selected regions, concentrating on a number of characteristics shaping future import demand. For the empirical assessment of the Austrian export potential in overseas economies, the analysis augments the standard gravity model for bilateral trade in goods and services with supply-side and competitiveness-enhancing (policy) measures available for all OECD members. In particular, the empirical model focuses on the effects of R&D expenditure, the funding of tertiary education as well as sustainable energy consumption on exports. Assuming Austria catching up to the average of the Scandinavian countries (Denmark, Finland, Sweden) on these three indicators, the results from alternative scenario analyses suggest positive export effects from these different supply-side affecting variables. In quantitative terms, the largest export gains are identified for the industrial countries overseas, followed by the BRICS economies. These findings are also supported by solid growth prospects for these country groups.