Wifo Expects Less Economic Growth Until 2029

According to the Wifo forecast published on Friday, the Austrian economy will grow by an average of only 1.0 percent per year until 2029, taking inflation into account. In November, the WIFO economists had still predicted an average real growth of 1.3 percent.

Economic Growth Could Be Weaker Due to Austerity Measures

The forecast does not take into account the austerity measures presented on Thursday by the likely future FPÖ-ÖVP government. These could "also result in a weakening of overall economic demand," the Wifo report states. With regard to the future US government's tariff policy under President Donald Trump, the forecast assumed a "rather cooperative approach," study author Josef Baumgartner told the APA. However, the Trump administration could also take a more aggressive approach. "Taken together, this carries the risk that the GDP will shrink for the third year in a row in 2025," the study warns.

Wifo Expects 0.6 Percent Economic Growth in 2025

For the current year 2025, Wifo currently expects a growth rate of +0.6 percent. In 2026, it should then be +1.2 percent, after which the annual growth rate will settle at around one percent until 2029. Despite the rather moderate growth, the economic researchers expect a declining unemployment rate. Baumgartner mainly attributes this to the demographic development in the coming years. For 2025, the unemployment rate is still calculated at 7.4 percent. By 2029, it is expected to gradually decrease to 6.2 percent, according to the estimate. The budget balance (excluding planned measures) is expected to be an average of minus 4.2 percent of gross domestic product (GDP) over the next five years. The national debt ratio would therefore rise to 89.2 percent of GDP by 2029. In the autumn, the average budget deficit was still given as 3.8 percent.

(APA/Red)

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