Stable Consumer Expenditures despite Recession

In past recessions, Austrian consumer have tended to maintain their level of consumption; therefore, in contrast to other countries precautionary saving has not been an important factor in the aggregate. This conclusion seems also to apply to the first half of 1993. The decline in the propensity to save was one of the major factors boosting real consumer expenditures by 1 percent above the level in 1992. The favourable development of private consumption was mainly due to the rise in purchases of non-durables and services (+2.0 percent). The decline in economic activity is, however, clearly reflected in the drop in outlays for durable consumer goods (–3.8 percent), a category which responds very strongly to income changes.