2023-10-06 22:00:10
Innsbruck (OTS) – Austria is in the middle of a recession. A short one, as the economic researchers emphasize. But even after that, the prospects remain slim. This also means a need for action by politicians and the social partners.
Forecasting is a difficult thing. Especially when they affect the future.” This humorous quote from the American writer Mark Twain of course also has a lot of truth, as Austria’s leading economic researchers from Wifo and IHS have once again had to take note of. So far they had forecast growth for the domestic economy – although small, but still. Like Germany before it, Austria has now slipped into a recession, meaning the gross domestic product is falling.
The economic picture has therefore darkened further, and the further growth prospects are also not very encouraging, with only a very meager increase for 2024. After almost 8 percent this year, inflation will still remain above 4 percent next year. Wifo boss Gabriel Felbermayr got to the heart of the problem: Austria is suffering from a toxic cocktail of very high energy prices, sharply increased interest rates, a weak global economy and dwindling international competitiveness.
One can also sum up the reactions from politics and social partnership to the more than just unpleasant message from economic researchers: Austria is facing an election year and is currently in the middle of an extremely difficult autumn wage round. The federal government sees the economic trough with “minus growth” (the euphemism of the day from ÖVP Economics Minister Martin Kocher) soon being overcome – the principle of hope probably applies here. The opposition sees the government as a total failure. Business is warning against wage agreements that are too high, and the union now wants to demand this even more.
Aside from all these expected reactions, it must finally be clear to everyone involved in the country: Austria is walking on very thin ice. We are losing competitiveness because of high inflation across the board. The government must accept this. And the scope for the wage round has by no means increased, on the contrary.
The recession will also cost the government revenue. And at the same time, the pressure continues to increase, on the one hand, to finally reduce inflation to EU levels with stricter measures and, on the other hand, to stimulate the economy and purchasing power. A national solidarity would be overdue to save Austria’s prosperity. In times of insensitive and dispensable burger-sayers from the Chancellor and a less than constructive opposition, such a thing would almost be a miracle. Unfortunately, forecasts in this regard are not all that difficult in this country.
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