Activity Slowing Down

Recessionary forces from abroad are spreading across the Austrian economy. Foreign orders to manufacturing industry are in decline and the rising effective Schilling exchange rate may become an additional export barrier. Domestic consumer confidence and the investment climate remain unshaken for the time being, but the construction boom has probably passed its peak. With the fall in the dollar the perspective of an export-led recovery appears more remote. Lower import prices should contribute toward deceleration of inflation below the current 4 percent annual rate.