Austria's engines of growth under pressure

Austria had one of the lowest GDP growth rates in the European Union in recent years. Since mid-2022, the growth contributions of all major components, except for the public sector, have been negative from both a production and a demand perspective. The weak performance of exports and manufacturing is likely to be due to rising energy prices and high wage settlements, among other things. The slight decline in private consumption is particularly noteworthy, as real household incomes developed significantly better. This increase in the savings rate could be partially reversed through confidence-building fiscal policies. Given the difficult budgetary situation, regulatory relief could be considered to raise recently weak housing investments.