OECD forecasts economic recovery

The Austrian economy will develop better than the Eurozone average, the Organisation for Economic Co-operation and Development (OECD) has predicted.The international organisation said today (Fri) that the Austrian gross domestic product (GDP) will grow by two per cent annually between this year and 2012.The OECD added it expected the Eurozone’s economy to grow by just 1.7 per cent this and next year before a two per cent increase in 2012. The term Eurozone describes the European Union’s (EU) 16 members which use the Euro as their currency.The Austrian jobless rate will have edged down from 4.5 to 4.3 per cent by 2012, according to the OECD’s outlook, while the country’s annual inflation rate will grow from 1.6 per cent in this year to 1.8 per cent next year and 1.8 per cent in 2012.The OECD also announced it expected its 23 member states’ economies to grow by an average 2.3 per cent from this to next year before a 2.8 per cent improvement from 2011 to 2012.The Austrian National Bank (OeNB) said only a few weeks ago that it expected the Austrian economy to grow by 1.8 per cent year on year in 2010. The bank initially predicted only a 1.6 per cent improvement.The Austrian GDP soared by 3.5 per cent year on year to a whopping 3.9 per cent in 2009 when companies of all branches were badly hit by the economic crisis. Analysts warned in the spring that the unemployment rate could reach a record high by the end of this year. The number of people out of work, however, actually declined.Austria currently has the second-best unemployment rate within the Eurozone with 4.5 per cent behind the Netherlands (4.3 per cent). Spain is doing worst in this regard as more than one in five residents are currently unemployed (20.5 per cent).The Austrian import and export industry seems to be over the worst of the credit crunch.Statistik Austria said earlier this month that both import and export rates rose year on year in August. The agency’s report shows Austrian companies imported goods worth 71.71 billion Euros in the month, up by 14 per cent year on year, while the value of exports improved by 15.3 per cent to 69.59 billion Euros.Experts are currently wondering whether the significant economic recovery will be slowed down or even come to a halt by the recently announced budget cuts and tax increases.The Austrian government, formed by the Social Democrats (SPÖ) and the conservative People’s Party (ÖVP), decided to implement higher taxation rates on tobacco products, car fuel as well as a new flight ticket tax. The coalition also agreed on a 500-million-Euro bank solidarity tax after having financially supported the country’s leading financial institutes during the past two years. All measures will come into effect next year.