After revision: slight GDP growth expected for 2025
- Chance of small GDP growth in 2025 increased after revision of previous year's data
The latest revision of GDP by Statistics Austria shows a somewhat more favourable picture of the past economic situation. We continue to expect slight growth in the Austrian economy for the rest of the year. As a result of the revision of the previous year, GDP now rose slightly by 0.1 percent for the year as a whole, with the GDP forecast remaining unchanged. Expectations for 2026 remain low as a result of US tariff policy, but we still expect economic growth of 1.1 percent. - Unemployment rate expected to rise to 7.5 percent in 2025
In view of the ongoing economic challenges, a further deterioration of the situation on the labour market is to be expected in the coming months. We assume an average unemployment rate of 7.5 percent for 2025. For 2026, we continue to expect stabilization at this higher level. - Budget deficit will continue to exceed 4 percent of GDP in 2025
The announced austerity package of 6.4 billion euros or 1.3 percent of GDP for 2025 will only slightly reduce the budget deficit in 2025. According to the official budget estimate, we expect a budget deficit of 4.5 percent of GDP for 2025. - Energy prices support inflation decline
In the first five months, inflation rose to an average of 3.1 percent. We expect inflation to gradually slow down in the coming months. We expect inflation to average 2.5 percent in 2025 and 1.9 percent in 2026. However, the forecast risk is now clearly pointing upwards. - Another interest rate cut expected by the ECB
At its June meeting, the ECB decided to cut key interest rates further by 25 basis points, as the burden of higher US tariffs outweighs the positive growth impulses from a more expansionary fiscal policy in Germany and at the EU level. We therefore only expect one further cut in September, which should mean that the deposit rate should reach its low at 1.75 percent.
As of June 2025.
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