Economy is slowly recovering, problems remain

For this year, WIFO and IHS are forecasting GDP growth of 0,9 or 0.8 percent. WIFO canceled its forecast for 2027 1.3 percent on, the IHS continues from 1.0 percent out of. Industry is driving the recovery, said WIFO boss Gabriel Felbermayr. The order situation is good and the mood is improving. World trade is increasing, driven by the technology boom. The local industry also benefits from this, said IHS boss Holger Bonin. Export growth will be 2.6 percent this year and 2.8 percent next year.

Real wages fell

However, the numbers also obscure developments that worry economic researchers. They see the greatest burden as the high import prices for energy. The price of Brent crude oil has almost doubled in the past year and the price of gas has even tripled. The weak euro doesn’t make the situation any easier. “Austria produces more, but can afford less and less because of high energy prices,” said Felbermayr. According to WIFO calculations, real net wages and salaries are expected to fall by 1.5 percent in the current year. This also dampens the desire to consume.

Inflation remains high

The institutes raised their inflation forecasts. According to WIFO, the inflation rate is expected to rise this year 3,3 Instead of rising by 3.2 percent as previously assumed, the IHS expects inflation to rise by 3.1 percent instead of 3.0 percent. In the coming year, the two institutes expect an increase of 2,6 or 2.8 percent out of.

Felbermayr welcomes the government’s measures to combat inflation – from reducing the electricity levy, rent and fuel brakes to halving the VAT on basic foodstuffs. Inflation was therefore 0.3 to 0.4 percentage points lower overall.

Of the Parcel taxwhich is intended to counter-finance the VAT reduction on staple foods, economic researchers are not very impressed. Other ways of counter-financing may have to be found. Savings would have been better, said Bonin. But even with an increase in the price of online orders due to the controversial tax, there is an overall inflation-dampening effect, said Bonin. However, inflation remains at too high a level. Energy prices remain a “major uncertainty factor”.

Felbermayr the strong is worried Rise in bond interest rates because of rising national debt worldwide and the high demand for debt capital for the AI ​​boom. This has a negative impact on investments, including for private individuals. This doesn’t bode well for residential construction.

Construction sector in trouble

There is already a lot going on in the construction sector. According to Felbermayr, it has lost a quarter of gross value added since 2018. The WIFO boss is in favor of one Construction strategy out of. A coordinated concept is needed. Felbermayr renewed his demands that renovated old buildings be treated like new buildings in terms of tenancy law: “That could trigger a renovation boom.”

In addition, bank lending should not be made more difficult and solutions should be sought to support municipalities in non-profit housing construction. “That would have a stronger price-reducing effect than the rent cap,” said the economic researcher.