Bringing Austria’s economy back to the top: what it needs now

The current one Economic forecast of the EU Commission for 2026 shows that only Italy and Romania are doing worse this year, as well as Ireland due to a “special effect”. GDP growth in Austria is limited to 0.6 percent and will not even break the one percent mark in 2027. (Wifo’s calculations are somewhat more optimistic.) Even this growth is on shaky ground, warns Monika Köppl-Turyna, director of EcoAustria. If the Iran conflict continues, Austria could return to it recession slide. The economist is convinced that the longest recession since the Second World War has not yet been overcome: “The state sector is growing, not the private sector.” The increase in GDP would be mainly due to the public sector. The private sector would still be in the red.

How did Austria maneuver itself into this situation? Through a cost-whatever mentality and by not knowing how to take advantage of various crises. “We explain why we got into a whirlpool, but we don’t learn any lessons from it,” says Köppl-Turyna. Other countries would have done that. Denmark and Sweden have reformed their pension systems, and even in Germany “a lot is now happening” with the second pension pillar.

Austria’s federal government would at least have that Industrial Strategy 2035 presented – with 117 measures to become more competitive again. In principle, this strategy was successful, says the economist. However, she adds: “The most essential thing is missing.” This refers to major structural reforms that address the issue of government spending. If that doesn’t happen, the scope for action would be too limited. “If a year of working longer brings four billion euros into the budget and the entire support for energy-intensive industry is budgeted at 250 million euros, you can see where the sums really are.”

Your suggestion as to how the trend reversal should be achieved now? The Retirement age increase quickly and offer investors a long-term perspective to hold on to the location over the next 15 years. “I see far too few or even wrong signals in this direction,” criticizes Köppl-Turyna with regard to discussions about bank levy and wealth tax. And Austria’s top managers also have clear ideas about how to get back to the top.