Economic Overview

The Austrian economy is deemed one of the most stable in Europe. The country relies on a very strong network of export-focused SMEs, excellent academic standards and significant spending for research and development. After growing 4.8% in 2022, Austria’s GDP stagnated in 2023 (+0.1% as per the IMF; although the EU Commission’s first estimates point to a negative growth of 0.5%), with a slowdown in activity observed during the first semester, followed by a gradual recovery in the latter part of the year. The manufacturing sector has been in a recession since mid-2022 due to significantly reduced demand from its primary export destination, Germany; whereas the robust momentum witnessed in the services sector, particularly in financial and economic services, as well as tourism, helped keep the country’s economy afloat. A gradual easing of high inflation over the forecast horizon should contribute to a slight uptick in economic activity for 2024 and 2025, with forecasted real GDP growth rates of 0.8% and 1.7%, respectively (IMF). This envisaged trajectory is supported by an anticipated resurgence in private consumption, fueled by the resumption of real wage growth. Furthermore, a recovery in the export sector is expected to contribute to this dynamic. Nevertheless, the prospect of tepid investment development, particularly in the construction sector due to elevated interest rates, may exert a dampening effect on overall economic growth.

Thanks to the phasing out of support measures taken in the context of the pandemic and of those intended to mitigate the impact of high energy prices, the general government deficit decreased from 3.6% of GDP in 2022 to an estimated 2.1% in 2023, when an increase was recorded in tax revenue and social contributions due to a robust labour market and high inflation. Despite sluggish growth, the deficit should follow a downward trend in 2024 and 2025 (at 1.3% and 1.2%, respectively – 2.4% and 2.2% as per the EU Commission projections) as the total net budgetary cost of energy-related measures is projected to decrease to 0.1% of GDP in 2024 from 1.6% one year earlier. Nominal GDP growth is poised to contribute to a sustained decline in the public debt-to-GDP ratio. IMF projections indicate a reduction from 78.5% in 2022 to 74.8% in 2023, followed by a subsequent decrease to 74% in 2024 and a further decline to 71.7% in 2025. Meanwhile, inflation remained high in 2023 (7.8%), driven by significant real wage increases, but is expected to gradually subside over the forecast horizon (3.7% and 2.5% in 2024 and 2025, respectively).

Austria has a low percentage of unemployment compared to other countries in the Eurozone and the EU, as well as global comparison. Although it increased marginally in 2023 (to 5.1%, from 4.8% one year earlier as the increase in labour supply outpaced employment growth), the unemployment rate is still at a historically low level. This trend is expected to continue in 2024, with a projected unemployment rate of 5.4% before starting to decrease again (IMF). According to the latest figures by the EU Commission, nominal wages increased by 8.3% in 2023 and should continue on an upward trend (7.1% in 2024 and 3.9% in 2025), driven by inflation and the tight labour market. Overall, Austrians enjoy one of the highest GDP per capita (PPP) in Europe, estimated by the IMF at USD 69,069 in 2023.

Foreign Trade

The Austrian economy is heavily dependent on foreign trade, which accounts for 124% of GDP (World Bank, latest data available). Its trade with the countries of the European Union accounts for almost 70% of its total trade (WTO). According to data from Statistics Austria, machinery and vehicles retained their position as the foremost product group in Austrian international trade during 2022, accounting for 30.8% of imports and 35.6% of exports. Imports in this category experienced an 11.2% increase, reaching EUR 65.72 billion, while exports grew by 12.6%, totalling EUR 69.03 billion. Other prominent export product groups included manufactured goods, which surged by 21.4% to EUR 42.90 billion, chemical products with a 15% increase to EUR 29.08 billion, and other manufactured goods rising by 14.2% to EUR 20.27 billion. Notably, these four product groups collectively represented 83.1% of Austrian exports in 2022. Other major import groups were manufactured goods (16.3%) and chemical products (13.8%). Additionally, there was a substantial rise of 86.0% in imports of fuels and energy, amounting to EUR 25.88 billion.

Germany is by far Austria’s privileged partner for both imports and exports. In 2022, Austrian exports to Germany represented 29.9% of the total, while imports accounted for 32.2%. Italy (6.8%), the U.S. (6.7%) and Switzerland (5.1%) were among the main export destinations, whereas for imports China was the second main origin (8.1%), followed by Italy (6.1%) and Switzerland (4.7% - Statistics Austria). The manufacturing industry is well integrated into Germany’s value chain. Austria remains therefore dependent on the economic conjuncture in Germany and in other central and eastern European countries. Overall, the EU accounted for 68.6% of exports and 65% of imports in 2022.

Austria imports more goods than it exports: USD 213.7 billion of goods were imported in 2022 (+19.8% y-o-y) as opposed to USD 194.1 billion of exports (+17.2% y-o-y – Statistics Austria). In the same year, exports of services amounted to USD 81.2 billion while imports stood at USD 73.8 billion. Austria’s external trade balance has invariably been in surplus since 1999: in 2022, the external balance of goods and services stood at 0.5% of GDP (World Bank), down from 0.9% one year earlier. From January to September 2023, preliminary data from Statistics Austria show that the total value of imported goods reached EUR 153.17 billion, while exports of goods amounted to EUR 149.64 billion. Austrian international trade sustained a downward trend in this period, marked by a more pronounced decline in imports than in exports, resulting in a trade surplus: imports experienced a 4.% decrease, whereas exports registered a 3.4% increase. Consequently, the trade balance deficit narrowed to EUR 3.54 billion, a significant improvement compared to the EUR 14.83 billion deficit recorded in the corresponding period the previous year. In the first nine months of last year, Austria experienced a decline in the value of goods imported from European Union member states, totalling EUR 98.19 billion, reflecting a decrease of 6.4%. Conversely, the value of goods exported to EU countries saw a positive trend, with a notable increase of 2.6% compared to the corresponding period in 2022, reaching EUR 102.21 billion. This resulted in a favourable trade balance with the European Union, amounting to EUR 4.02 billion, marking a significant improvement from the deficit of EUR 5.28 billion recorded in the same period of 2022.

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

The summary of the EU’s economic response to the COVID-19 pandemic is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) in Austria, please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.