Rebound In Consumer Demand

Private consumption in Austria gained strength after mid-1989 as the income gains stemming from the tax reform boosted spending with the usual time-lag. Demand for durable goods again proved very income-elastic and posted above-average gains. The international trend is for steady consumption growth in 1990, accompanied by some rise in the saving ratio, while in Austria the growth pace is expected to slow in spite of a marked decline in the propensity to save.