28.04.2023

First Quarter of 2023: Economic Momentum Continued to Decline

WIFO Flash Estimate

According to the latest WIFO Flash Estimate, Austrian economic output fell by 0.3 percent in the first quarter of 2023 compared with the previous quarter. In addition to declines in consumer-related and business service sectors, the development of domestic industry stagnated. On the demand side, foreign trade weighed on the economy.

According to preliminary estimates, GDP fell by 0.3 percent in the first quarter of 2023 compared with the previous period (key figure according to Eurostat). This means that momentum is cooling further after the stagnation of the past two quarters (third quarter of 2022 +0.1 percent, fourth quarter of 2022 –0.0 percent). In a year-on-year comparison, this means an increase of 1.8 percent compared with the first quarter of 2022.

Momentum continued to decline in service sectors in particular. In trade, transport, accommodation and food service activities, value added fell by 0.3 percent, and in other business activities by 0.2 percent.

In the construction and industrial sectors, economic activity remained subdued, even though an expansion (construction +1.1 percent after –1.1 percent in the fourth quarter of 2022) or stagnation (NACE 2008, sections B to E +0.1 percent after –0,5 percent in the fourth quarter of 2022) was recorded most recently.

External dynamics declined in the first quarter. At –1.8 percent, exports fell more sharply than imports (–0.1 percent), so that their development weighed on GDP.

In contrast, consumer demand by private households (including private non-profit institutions serving households) had a slightly stabilising effect (+0.7 percent). After three quarters of growth, public consumption has not expanded any more.

Investment demand developed positively, with gross fixed capital formation increasing by 1.1 percent.

Important information

The WIFO Flash Estimate is a first estimate for the past quarter. It is based on the Quarterly National Accounts of Statistics Austria and includes GDP as well as components in the form of seasonally and working-day adjusted rates of change compared with the previous quarter (key figure according to Eurostat standard).

On 2 June 2023, Statistics Austria will publish quarterly GDP data and main aggregates for the fourth quarter of 2022 based on more complete data, as well as preliminary annual data for 2022.