Cautious Recovery of Domestic Demand. Economic Outlook for 2006 and 2007

Austria's economy is expected to expand by 2.4 percent in real terms this year, slightly faster than the euro area average. Exports and manufacturing output continue to drive activity forward, and a revival of investment in machinery and equipment is deemed imminent. Higher wage settlements and low inflation will allow private household spending to recover. The labour market is shaped by a strong increase in part-time jobs and rising labour supply. The number of unemployed should decline this year, due to public expenditure on training measures being reinforced.