The Austrian economy will be in the coming recover a bit for two years according to the economic outlook of the Organization for Economic Co-operation and Development (OECD).
After one GDP growth of 0.3 percent this year should Austria’s economy 2026 by 0.9 percent and Increase by 1.2 percent in 2027 – significantly less than was forecast a year ago. But Austria is also below average in an international comparison.
The OECD countries will achieve GDP growth of 1.7 percent this year and next year. The OECD forecasts economic growth of 1.8 percent for 2027. The Eurozone is also doing better than Austria, with expected growth of 1.2 percent next year and 1.4 percent the year after that. And an increase of 1.7 percent (2026) and 1.8 percent (2027) is expected for the G-20 countries. The OECD forecasts global economic growth at 2.9 percent for 2026 and 3.1 percent for 2027.
Private consumption
The OECD expects private household consumption in Austria to increase in the next two years. On the one hand, declining inflation, a robust labor market and lower savings should contribute to this. And low interest rates will lead to more investment, the OECD expects. Inflation is expected to approach the targeted two percent mark by the end of 2027.
The economic recovery is being slowed by ongoing budget consolidation. The deficit should be reduced to less than 3 percent by 2028. However, the consolidation will have a slight impact on demand, the OECD speculates in its outlook. Ultimately, according to economists, Austria must respond to challenges such as the aging of the population, climate change and increasing defense spending. According to the outlook, reforms of public finances are necessary – for example in the pension system or social benefits.
Targeted investments
The weaker economy in Europe and further tariff shocks could also slow the recovery. The OECD also advocates targeted public investments to promote corporate dynamism. These would strengthen resilience. Energy policy measures should be taken to ensure that energy-intensive industries are competitive again. According to the OECD, medium-term growth could be boosted by expanding the broadband network, easing infrastructure regulations and introducing investment incentives. In its outlook, the OECD suggests easing zoning regulations and removing other restrictions on the housing market. But a more integrated and competitive energy supplier market could also lead to lower energy prices.
Around two thirds of Austria’s trade goes to the European Union, the economists note. However, the country is deeply integrated into regional value chains. Therefore, US tariffs on EU goods should have a significant impact on Austria’s exports. Around 21 percent of Austrian exports are intermediate payments for the exports of foreign partners. However, Austria is likely to benefit from higher government spending in Germany in 2027. High energy prices are another problem facing the Austrian economy: electricity prices for industrial use are around 40 percent higher than before the Ukraine war.