2nd December 2023 – (Vienna) Austria’s gross domestic product (GDP) has fallen into recession after experiencing a 1.4 per cent contraction in the second quarter of 2023, followed by a further decline of 1.8 per cent in the third quarter, according to Statistics Austria. The official definition of a recession is two consecutive quarters of economic contraction.
Tobias Thomas, the Director General of Statistics Austria, acknowledged the country’s economic slowdown, stating, “Following the economic boom until mid-2022, the economic slowdown has continued with slightly negative growth rates since the second quarter of 2023.”
The recession in Austria is primarily attributed to the diminishing economic output of the industry and trade sectors, which experienced respective year-on-year declines of 4.2 per cent and 7.6 per cent in the third quarter of 2023.
Despite the economic challenges, there have been some positive developments in Austria. The country, which has been grappling with high inflation since early 2022, has witnessed a decline in its annual inflation rate. Statistics Austria reported that inflation dropped from 11.2 per cent in January to 5.4 per cent in October, mainly driven by decreasing energy prices.
Furthermore, Austria’s tourism sector has demonstrated resilience this year, with the country recording a record-breaking 80.89 million overnight stays during the summer season (May to October).
In its recent economic outlook report published on Wednesday, the Organization for Economic Cooperation and Development (OECD) projected a contraction of 0.4 per cent for the Austrian economy in 2023. However, the OECD predicts a gradual recovery with economic growth expected to reach 0.6 percent in 2024 and 1.5 percent in 2025.