Higher inflation will slow the recovery, but not stop it
With the start of the Iran war, economic sentiment in Austria has deteriorated significantly. "The UniCredit Bank Austria Economic Indicator fell to minus 1.3 points in March, the lowest value in four months," says UniCredit Bank Austria Chief Economist Stefan Bruckbauer, adding: "In the first quarter of 2026, the UniCredit Bank Austria Business Indicator averaged minus 0.8 points. The best result in almost three years signals a continuation of the recovery of the Austrian economy with a slight increase in GDP at the beginning of 2026. However, the deterioration in sentiment in March suggests that the upward trend is beginning to slow."
- Deteriorating sentiment due to the Iran war caused the UniCredit Bank Austria Business Indicator to fall to minus 1.3 points
- Significant slump in consumer sentiment and sentiment in the service sector, while pessimism in industry and construction has fallen slightly
- Growth forecast for 2026 lowered to 0.8 per cent and for 2027 to 1.2 per cent
- Geopolitical uncertainties and higher inflation will weigh on consumption and investment momentum
- Turnaround on the labour market is delayed: unemployment rate in 2026 will be 7.4%, as in the previous year
- Longer duration of the energy crisis expected: We have raised our inflation forecast for 2026 from 2.5 per cent to 3 per cent and for 2027 from 2.2 per cent to 2.6 per cent
- ECB will respond with interest rate hikes: Key interest rates expected to rise by 25 basis points in both June and September
UniCredit Bank Austria Business Indicator (PDF)
UniCredit Bank Austria Business Indicator – Computation method (PDF)
as of April, 2026
About UniCredit Bank Austria Business Indicator
The UniCredit Bank Austria Business Indicator provides an overview of the current economic situation in Austria.
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