The Economic Outlook for 1991 and 1992: Business Cycle Passes Trough Without Recession

Until early 1991 demand, output and employment in Austria rose virtually unabated. Lively demand from Germany stimulated exports and manufacturing output, and consumer spending was little affected by the Gulf crisis and recession tendencies abroad. According to preliminary figures real GDP rose 4.6 percent in 1990. Nevertheless, early signs of a slowdown of activity have shown up in recent months. Foreign markets other than Germany are stagnating, industrial firms receive fewer orders and have turned more cautious in hiring new personnel. Pent-up demand for additional production capacity and for consumer durables has largely been satisfied by now. Thus, even apart from the slowdown abroad, domestic demand will come down from recent boom levels towards more sustainable rates of growth. Real GDP is projected to increase by 3 percent in 1991 and by 3¼ percent in 1992. Multiplier effects of the strong expansion of income and employment, the brighter international outlook after the Gulf war and continued demand stimulus from Germany should all prevent the economy from slipping into a recession.