Weak Domestic and Foreign Demand, Deteriorating Labour Market Situation. The Austrian Economy in 2014

Austria's GDP grew by just 0.3 percent in 2014, making for a sluggish economy for the third year in a row. Causes for the sluggishness were not just continued investment reticence on the part of businesses and muted expenditure on the part of private households but also the lack of any strong impetus from foreign trade. Businesses and households alike were increasingly pessimistic in their sentiment. Labour supply grew more quickly than employment, with the result that the unemployment rate rose to 8.4 percent (2013: 7.6 percent). Plummeting energy prices made inroads on inflation (+1.7 percent against +2.0 percent in 2013), but the positive inflation gap vis-à-vis Germany and the average of the euro area remained unaffected.