Financial Market Crisis Weighing on Economic Growth. Economic Outlook for 2008 and 2009

Economic growth in Austria is set to decelerate to an average 2.1 percent in volume this year. This is primarily the consequence of the international financial crisis that originated from US real estate markets. Scope and duration of that crisis can still not be reliably assessed at present. The projection for GDP growth in 2009 of 1.7 percent is therefore subject to considerable risk. Exports, industrial output and investment are slackening markedly. Private consumption is not gaining momentum, partly because of inflation accelerating to 2.9 percent. While employment this year is rising even faster than expected, the decline in unemployment is likely to reverse as from 2009.