Austrian economy to stagnate in 2023 – economic institutes

June 28 (Reuters) – Austria’s economy is expected to stagnate throughout the second half of the year, hindered by inflation, a tighter monetary policy and a weak international economy, before rising again in 2024, according to forecasts by two leading economic institutes.

The WIFO institute said manufacturing and its associated sectors are experiencing a recession while services are expanding, a trend that should ease in 2024.

“Nevertheless, there are no signs of a global recession, especially since energy prices, which had risen sharply in 2022 and slowed the economy, have recently fallen,” WIFO said.

It thus expects Austria’s gross domestic product (GDP) to grow by 0.3% in 2023, before ticking up to 1.4% in 2024.

The Vienna-based Institute for Advanced Studies (IHS) similarly estimates 2023 GDP growth at 0.5% and 2024 growth of 1.4%.

It said Austria had entered a period of stagflation, with growth in domestic production expected to return by the end of 2023 as price pressure eases and the international economy brightens.

Both institutes expect inflation for 2023 to come in at 7.5%, with IHS expecting 4.0% inflation in 2024, while WIFO estimates it at 3.8%.