Activity Driven By Domestic Demand

Lively economic activity continued virtually unabated into early autumn. Industrial output in August rose 9 percent year-on-year, and overall employment growth accelerated to an annual rate of 2.4 percent (+70.000). However, a number of leading indicators suggest a weakening of activity in the months ahead. The U. S. and some European countries are heading for a period of stagnation, and the Gulf crisis as well as the fragility of financial markets may undermine business confidence. Higher oil prices have already pushed up the rate of inflation in Austria by ¾ percentage poinst within two months to 3.7 percent in September.