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“Austria Becomes More Vulnerable to Recessions“

Published: January 29, 2013; 23:37 · (Vindobona)

Christoph Neumayer, secretary general of the Federation of Austrian Industries (IV), argues that the low investments may cause a recession.

“Austria Becomes More Vulnerable to Recessions“ / Picture: ©

At the moment, there are first signs of a recovery. Although many European countries record negative growth rates, Austria is not affected, Neumayer explains. This year, Austria´s GDP is expected to grow by 1.0%. In the next years, the growth rate will accelerate, economists say. In 2016, the economic growth rate may reach 2.0%. In future, Austria will have to accept lower economic growth rates, Neumayer says.

IV´s chief economist Christian Helmenstein thinks that the current stagnation will merge into a recovery. At the moment, Austrian businesses are filling up their stocks and inventories. This is a typical leading indicator for a recovery, Helmenstein says. Moreover, the number of lay-offs was lower than expected. In total, Austria´s industrial sector has maintained a high level of employment. Also the earnings situation is better than anticipated, Helmenstein explains.

Although there is an upward trend for Austria´s economy, a recession cannot be excluded, Neumayer says. The development of investments is not satisfying at all, he says. “Most of the investments are not made in Austria, but in other countries.” The current investment growth rate comes at 1.3%. “Such a low growth rate makes Austria more vulnerable to recessions. And every weak phase may bring us a recession.” Neumayer warns.

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