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Economic Crisis Unleashes Deep Recession in Austria – Stabilization Expected at Year-End

Author

Listed:
  • Christian Ragacs

    (Oesterreichische Nationalbank, Economic Analysis Division)

  • Klaus Vondra

    (Oesterreichische Nationalbank, Economic Analysis Division)

Abstract

According to the June 2009 economic outlook of the Oesterreichische Nationalbank (OeNB), the Austrian economy is projected to enter a deep recession in 2009 owing to the global slump in growth, with real GDP set to shrink by 4.2%. After further declining by a modest 0.4% in 2010, positive real annual GDP growth of 1.2% will reemerge only in 2011. Compared with the OeNB December 2008 economic outlook, growth expectations for 2009 and 2010 were downgraded by 3.9 and 1.2 percentage points respectively. This major revision reflects the steep slump in the demand for exports and investment – unparalleled in the post-war period. The current downturn is so pronounced that GDP levels seen in 2007 will not return until 2011. HICP inflation will ease from 3.2% in 2008 to a mere 0.4% in 2009 and rise modestly to 1.1% and 1.2% in 2010 and 2011 respectively.

Suggested Citation

  • Christian Ragacs & Klaus Vondra, 2009. "Economic Crisis Unleashes Deep Recession in Austria – Stabilization Expected at Year-End," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 6-40.
    • Handle: RePEc:onb:oenbmp:y:2009:i:2:b:1
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    References listed on IDEAS

    as
    1. Christian Ragacs & Klaus Vondra, 2009. "Austria’s Exports to Eastern Europe: Facts and Forecasts Likely Impact of Slowing Exports on Growth in Austria," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 29-43.
    2. Clemens Jobst & Claudia Kwapil, 2008. "The Interest Rate Pass-Through in Austria – Effects of the Financial Crisis," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 54-67.
    3. Markus Leibrecht & Martin Schneider, 2006. "AQM-06: The Macro economic Model of the OeNB," Working Papers 132, Oesterreichische Nationalbank (Austrian Central Bank).
    4. Gerhard Fenz & Pirmin Fessler, 2008. "Wealth Effects on Consumption in Austria," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 68-84.
    5. Christian Ragacs & Klaus Vondra, 2008. "Decline in National Product Albeit by a Smaller Margin than in the Euro Area. Sharp Drop in Inflation," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 10-37.
    6. Lukas Reiss, 2009. "The Effectiveness of Fiscal Stimulus Packages in Times of Crisis," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 78-99.
    7. Gerhard Fenz & Martin Schneider, 2009. "A Leading Indicator of Austrian Exports Based on Truck Mileage," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 44-52.
    8. Walpurga Köhler-Töglhofer & Lukas Reiss, 2009. "The Effectiveness of Fiscal Stimulus Packages in Times of Crisis," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1/09, pages 78-99.
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    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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