Global economic weakness slows domestic exports
Since the second half of 2018, the global economy has expanded only moderately. In line with international developments, the upswing of the Austrian economy has lost momentum. The more unfavourable international environment weighs particularly on industrial production. As domestic demand is likely to remain robust, the Institute expects the Austrian economy to continue to grow by 1.5 % this year and 1.6 % next year. Inflation should be moderate at 1.6 % and 1.7 %, respectively, while unemployment should remain relatively high at 7.4 % both in 2019 and 2020. The current global political uncertainties, in particular a further escalation of trade tensions and a disorderly Brexit, continue to represent significant downside risks for the Austrian economy. The positive development of public finances should be used to implement deep structural reforms, as the Institute has been calling for for years.