Austria's Economic Growth Set to Link Up with the Pace in the EU. Medium-term Forecast for the Austrian Economy until 2001

Measured on average for the period 1997-2001, real GDP will increase at a rate of 2.4 percent per year, 1 percentage point more than for the preceding five-year period. While exports are currently the driving force behind economic growth, additional stimulus should come from investment in the course of 1998. Because of sluggish growth in household disposable income, private consumption will only pick up gradually and to a limited extent. The forecast decline in the current account deficit from 2 percent (1997) to approximately 1 percent of GDP is largely attributable to an improvement in the trade balance. In 1997, the general government deficit will fall well below the 3 percent target established by the Maastricht Treaty and should decline below 2 percent of GDP at the end of the projection period. As production picks up steam, it will also lead to an increased demand for labor. But the unemployment rate will only decline slowly (according to Eurostat, from 4.4 percent in 1997 to 4.0 percent in 2001).