Vienna, September 14 – The Austrian Central Bank has drastically revised its economic outlook in its latest forecast. The real gross domestic product (GDP) is now expected to shrink by 0.7% this year, with a modest increase of 1% projected for 2025, the bank announced on Friday, according to a report from APA.
Economic Recession in Sight
In its previous forecast, the central bank anticipated a slight growth of 0.3% for 2023 and a more substantial acceleration of 1.8% in 2025. This downward revision comes after leading economic institutes Wifo and IHS predicted zero growth or minimal growth of 0.3% for this year in late June. Earlier in September, Raiffeisen Research also acknowledged the possibility of a 0.5% contraction in GDP for 2023.
| Institution | 2023 GDP Forecast | 2025 GDP Forecast |
|---|---|---|
| Austrian Central Bank (previous) | +0.3% | +1.8% |
| Austrian Central Bank (current) | -0.7% | +1.0% |
| Wifo/IHS | 0% – 0.3% | N/A |
| Raiffeisen Research | -0.5% | N/A |
Two Consecutive Years of Recession
The Austrian economy shrank by 0.8% in 2023, marking the second consecutive year of recession. The central bank attributes this downturn to declining industrial output and sluggish consumer demand. Austrian industry has been particularly affected by global economic weakness, with energy-intensive sectors and industries related to construction being the hardest hit.
Key Sectors Affected
The ongoing recession has had a pronounced effect on energy-intensive industries, including manufacturing and construction. The Austrian Central Bank highlighted the impact of international economic challenges, which have further strained domestic production and industrial performance.
| Year | GDP Change (%) |
|---|---|
| 2023 | -0.8 |
| 2024 | -0.7 |
| 2025 | +1.0 |
Looking Ahead
With Austria facing its second straight year of economic contraction, the outlook remains uncertain. The central bank’s forecast suggests that while moderate growth is expected in 2025, the next two years will likely be characterized by weak performance, particularly in key industrial sectors.
Key Keywords: Austrian Central Bank forecast, GDP contraction, industrial decline, consumer demand, energy-intensive industries, recession forecast, Wifo and IHS forecasts, Raiffeisen Research, construction industry challenges
