Gradual recovery of investment
In 2025, the Austrian economy has returned to moderate growth after a prolonged recession. According to the IHS forecast, real GDP rose by 0.5% in the current year. Economic growth is expected to reach 1.0% and 1.1% in the next two years. Due to a loss of international competitiveness and protectionist tendencies in world trade, the pace of the recovery is likely to lag behind previous upturns. Inflation is expected to decline from an annual average of 3.6% in 2025 to 2.5% in 2026 followed by 1.9% in 2027. With the economic recovery, the labor market should improve. The unemployment rate is expected to fall from 7.4% in the current year to 7.1% in 2027. IHS forecasts a budget deficit of 4.2% of GDP for 2026 and 4.0% for 2027, following on from 4.4% in 2025.