Austrian economy recovers, says OECD

The Austrian economy will manage to grow by nearly one per cent this year, according to the Organisation for Economic Co-operation and Development (OECD).

The Paris-based institution announced yesterday (Tues) that the small alpine state’s economy had chances to do 0.8 per cent better in 2012 than in 2011 before achieving an improvement of 1.6 per cent in 2013.

OECD experts also said that the average gross domestic product (GDP) of the 17 European Union (EU) countries which were using the Euro as their currency could decline. The economy in the Eurozone is set to shrink by 0.1 per cent this year, according to OECD analysis. Among those countries, Greece will struggle the most. The state’s GDP will dwindle by 5.3 per cent in 2012 before another setback (minus 1.3 per cent) in the following year.

Austrian People’s Party (ÖVP) Foreign Minister Michael Spindelegger said the EU would not stop helping Greece in the crisis. “The European Union has no revolving door,” he said in an attempt to dismiss rumours that EU leaders are debating possible exit scenarios for the debt-ridden country.

OECD analysts warned that the economy in some countries in Europe would not manage to recover in the foreseeable future due to exaggerated austerity measures. Francois Hollande, the new president of France, might feel strengthened by this statement. The left-winger emphasised the importance of growth aspects in upcoming EU agreements – a point of view which contradicts ÖVP Finance Minister Maria Fekter’s stance. She labelled Hollande’s visions as “nonsense” in a recent interview.

The OECD’s economic forecast follows predictions by the European Commission (EC) which warn from a decrease of the average GDP in the Eurozone of 0.3 per cent this year compared to 2011. The EC said the Austrian GDP would grow by 0.8 per cent at the same time. Fekter announced that an improvement of 1.2 per cent was possible in her opinion. ÖVP Economy Minister Reinhold Mitterlehner predicted the domestic economy to do “around one per cent” better in 2012 than in 2011.

The Austrian Institute for Economic Research (WIFO) said in its most recent forecast that the Austrian economy will increase by 0.4 per cent from 2011 to 2012. The institute did not correct its prediction ever since issuing it in February – despite positive indicators for Austrian firms which are strongly engaged in export.

Austrian National Bank (OeNB) Governor Ewald Nowotny announced yesterday the bank had plans to alter its forecast for the Austrian economy. The OeNB recently said that the Austrian GDP will edge up by 0.7 per cent from 2011 to this year. Nowotny explained that he saw good chances for a growth rate of one per cent.