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2021/02/05 / Erste Group Research

Austria: slower recovery expected in 2021

As an open economy with a relatively large tourism sector, Austria is heavily affected by the COVID-19 pandemic and is expected to have suffered a recession of about -7.2% in 2020. The hardest-hit was the services sector, where the negative impact was exacerbated by a sharp decline in international tourism.

Given the current restrictions, a relatively strong recession is also expected in 1Q21. We assume that economic recovery will begin gradually from 2Q, although tourism should remain subdued until the summer. Based on these assumptions, we have slightly reduced our GDP forecasts for 2021 from 3.4% to 3.0%. For 2022, we expect GDP growth to accelerate to 3.4%.

We expect that, despite the gradual opening of the economy, there will be some increase in the number of unemployed when Kurzarbeit ends. We therefore expect the unemployment rate to rise slightly to 5.6% in 2021. In 2022, the unemployment rate should fall to 5.0%, in line with a further economic recovery.

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General information

AuthorErste Group Research
Product nameShort Notes Major Markets
Topic in focusMacro/ Fixed income
Economy in focusAustria
Currency in focusEuro
Sector in focus-


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