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OeNB forecast: Austrian economy will grow by 1.6 percent in 2010

OeNB Forecast ©


June 25, 2010

In its June macroeconomic forecast, the Austrian National Bank (Oesterreichische Nationalbank/OeNB) assumes that the Austrian economy will grow by 1.6% in real terms in 2010 (after a minus of 3.4% in 2009). According to the estimate of OeNB, growth will accelerate to 1.8% and 2.1% in 2011 and 2012, respectively.

In contrast to its forecast of December 2009, the OeNB presented quite a bright economic outlook for 2010 (+0.4 percentage points) and 2011 (+0.2 percentage points). The OeNB states that this was mainly due to the faster recovery of global trade. The National Bank is more optimistic than the experts of the Economic Research Institute (Wirtschaftsforschungsinstitut/Wifo) and the Institute for Advanced Studies (Institut für Höhere Studien/IHS) as well as the European Commission, who in unison predict a GDP growth rate of 1.3% for 2010. In early May, the European Commission had assumed a plus of 1.6% for 2011, while Wifo and IHS had forecast growth rates of 1.4% and 1.7%, respectively, at the end of March. But according to OeNB Governor Ewald Nowotny, a “dampening” of prospects for growth is expected in the medium term.

After exports plummeted by 15% in 2009, the OeNB estimates that they will increase by 4.6% in the current year. Exports were likely to go up by 5.4% in 2011 and 6.1% in 2012. No lasting trend reversal is expected in the labor market. Due to high energy prices in March and April, inflation will increase. The OeNB assumes an inflation rate of 1.7% for 2010.