For the Austrian Institute of Economic Research (Wifo), another weakening of Austria's economic dynamics is "not unlikely". The reason for this is a "renewed downward trend in some leading indicators and high economic policy uncertainty," writes Wifo in a current analysis. "The high uncertainty burdens consumer confidence and will therefore continue to slow down domestic economic dynamics," said Wifo economist Christian Glocker.
The industrial economy is unlikely to improve significantly, according to leading indicators. In the construction industry, economic assessments also remain pessimistic. Consumer confidence fell sharply again in April.
Turnaround in Economic Performance
There was a small glimmer of hope in the first quarter with the gross domestic product (GDP). According to Wifo's quick estimate from the end of April, the domestic economic performance slightly grew at the beginning of this year. Compared to the previous quarter, there was a real increase in GDP of 0.2 percent. The increase in the first quarter of 2025 marks a first turnaround after economic performance had stagnated or shrunk on a quarterly basis for about two and a half years. Compared to the same quarter of the previous year, however, there was a GDP decline of 0.75 percent in the 1st quarter (seasonally and working day adjusted), according to the Wifo estimate published on April 30.
Wifo currently cannot report any positive news regarding inflation and the labor market: After producer prices "noticeably rose again for the first time in a long time compared to the previous year" in March, the increase "reduces the likelihood of a sustainable weakening of inflation". The weak economy burdens the labor market, causing unemployment to continue to rise and the number of job vacancies to decrease.
(APA/Red)
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