Gradual Economic Recovery
The weakness of the global economy is weighing on the Austrian economy. After 2.4 % in the previous year, GDP growth is estimated to edge down to 1.6 % in the current year. For the years 2020 and 2021, growth is projected at 1.3 % and 1.6 % respectively. While exports are unlikely to gain momentum, consumption will be the key driver of growth. Inflation will remain moderate in the coming two years at 1.5 % and 1.7 % respectively. The labor market is not expected to improve any further; on the contrary, the unemployment rate will rise slightly to 7.5 %. In addition to a necessary reform of the tax structure with a reduction of the tax burden, the new government should address the areas education, research, digitalization, demographics, and climate change.