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Austria's Economy in 2008: International Economic and Financial Crisis Distresses the Domestic Economy

Author

Listed:
  • Sandra Steindl

    (WIFO)

  • et al.

    (WIFO)

Abstract

In 2008, Austria's economy grew by 1.8 percent in real terms. The year started out with a solid growth rate but ended with the country in recession. Economic stagnation in the third quarter was followed by a decline over the previous quarter of the seasonally and working day-adjusted GDP. Flagging international demand impacted on export-oriented manufacturing which recorded a perceptible check, especially in the second half of the year. In the fourth quarter, value added in the manufacturing sector fell by 1.4 percent against the previous quarter, a contraction of a scope similar to that in the autumn of 2001. The services sector constituted a stable pillar in 2008, and the tourism industry recorded a successful year. Fuelled by a steep rise in raw material prices, especially for crude oil and food products, inflation approached the 4 percent mark in summer. Once crude oil prices reversed their upward trend, inflation in turn began to recede in October. As a lagging indicator, until the end of 2008, the labour market responded only slowly to the cyclical downswing, and employment once again increased substantially in 2008.

Suggested Citation

  • Sandra Steindl & et al., 2009. "Austria's Economy in 2008: International Economic and Financial Crisis Distresses the Domestic Economy," WIFO Monatsberichte (monthly reports), WIFO, vol. 82(4), pages 261-318, April.
  • Handle: RePEc:wfo:monber:y:2009:i:4:p:261-318
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    Cited by:

    1. Luisa Carpinelli, 2009. "Real effects of banking crises: a survey of the literature," Questioni di Economia e Finanza (Occasional Papers) 55, Bank of Italy, Economic Research and International Relations Area.

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