Austrian economy set to pick up next year – economic institutes

BERLIN, March 30 (Reuters) – Austria’s economy is expected to pick up starting next year, once price pressures that are set to slow growth this year should begin easing in the second half, according to forecasts by two leading economic institutes published on Thursday.

The WIFO institute said it expects the economy to grow by 1.8% next year after reiterating its December forecast of 0.3% growth this year due to core inflation – excluding energy and food prices – being more entrenched than expected.

“This is prompting central banks to tighten monetary policy more significantly, leading the impending economic upswing to be more subdued,” said WIFO economist Marcus Scheiblecker.

Similarly, the IHS institute expects Austrian GDP to grow by 0.5% this year and 1.4% next year.

The Austrian economy grew by 5.0% last year, driven by catch-up effects following the coronavirus pandemic. However, since mid-2022, it has been slowed by the sharp rise in energy prices, according to the economic researchers.

WIFO said it expects inflation to slow to 7.1% this year from 8.6% last year and then sink to 3.8% in 2024. IHS predicts inflation this year will hit 7.5% before dropping to 3.5%.