OeNB Bulletin 2026/1: The impact of higher energy prices on Austrian GDP

This study presents empirical estimates on the impact of the recent surge in energy costs on Austria’s GDP. We employ a generalized version of the Knetsch and Molzahn (2012) partial-equilibrium shortrun supply-side approach to simulate the impact of a permanent 50% energy price increase (relative to 2019) on Austria’s manufacturing industries. Key parameters for our simulation are derived from Austrian firm-level data. Using our preferred parameter set, we find that the assumed energy price increases would have reduced value added in Austria’s manufacturing industries by between 1.8% and 2.3%. With a share of manufacturing in total Austrian GDP of around 17% (2019), this amounts to an impact on national GDP of between -0.3% and -0.4%. Adding additional impacts via inputoutput interlinkages approximately doubles these figures to -0.7% and -0.9%. Should energy prices stay higher permanently, additional output losses would occur in the long run via downward adjustments in capital stock. Our estimates highlight the importance of energy prices for policymakers and provide a basis for assessing alternative economic policy choices.