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IMF Report: Austria Should Make Cuts in Healthcare, Education, Pensions, Banks Should Raise Equity
Austria's outlook suggests a moderate improvement. The latest IMF report recommends Austria to conduct broad cuts in such areas of spending as healthcare, education and pensions. Also, Austrian banks should raise equity. Unemployment, although rising, has remained moderate at below 6 percent. Strengthening private consumption, investment, and exports are expected to raise growth to about 1½ percent in 2016. The current account surplus exceeds 2 percent of GDP thanks to sustained price competitiveness and robust tourism inflows. The authorities have made significant progress in revamping the regulatory framework for the banking sector. However challenges remain and further measures need to be taken. Therefore the IMF suggests three policy priorities: expenditure reforms, integrate immigrants into the Austrian economy and further strengthen financial sector resilience.
Latest IMF Report on Austria / Picture: © IMF
Raising growth sustainably calls for a push on reforms, gradual but sustained fiscal consolidation focused on making expenditures efficient, fast resolution of pending banking issues and vigilant monitoring of banks’ plans to increase their capital ratios, and rapid integration of immigrants.
1. While Austria’s post-crisis growth has been modest, the outlook suggests a…
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