About Austria Up-to-date
The information provided by Bank Austria in our publication “Austria Up-to-date” includes current economic forecasts and the most recent data for key indicators, in some cases in the form of charts. The key indicators are supplemented by regular comments, and their impact on the forecast is analysed in this report.
Upswing with headwinds
- Moderate economic improvement in the second half of the year
Due to the energy price shock and supply chain problems during the Iran war, the Austrian economy recorded a slight decline in GDP in the second quarter. Sentiment indicators have risen in recent months and real economic data, especially in industry, also show an improvement. We continue to expect economic growth of 0.8 percent in 2026 and a slight acceleration to 1.2 percent in 2027. - Unemployment rate remained at 7.6 percent in September
Due to the unfavourable impact of the consequences of the war in Iran on the economy, the labour market has not eased as originally expected so far this year. In view of the general conditions, however, the labour market in Austria remains quite robust. Nevertheless, we have had to raise our forecast for 2026 from 7.5 to 7.6 per cent. For 2027, we continue to expect a decline to an average of 7.4 per cent. - Double budget for 2027/28 adopted
On 10 July, parliament adopted the budget estimates for 2027 and 2028. By 2028, the deficit is to be reduced to 3 percent of GDP. In our opinion, the budget calculation is at least very tight in order to achieve the desired goal, there is no room for manoeuvre in the event of a weaker economy, which is why we have increased our forecast for the budget deficit in 2027 to 3.8 percent, after a deficit of 4 percent in 2026. On the other hand, the budget data so far indicate that the budget for 2026 can be largely adhered to as planned. - Renewed fuel price increase fuels inflation again
Due to renewed fuel price increases, inflation in Austria has risen again. In September, inflation reached 3.6 percent year-on-year, according to a flash estimate. However, inflationary pressure will remain elevated in the coming months. We continue to expect an inflation rate of 3.2 percent for Austria on average in 2026. - Renewed monetary policy tightening expected in December
Following the ECB's interest rate hike of 25 basis points in June and September, the ECB's tightening of European monetary policy is unlikely to be over yet. We expect the ECB to raise the key interest rate by a further 25 basis points in December.
As of Oktober 2026.
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