IDEAS home Printed from
   My bibliography  Save this article

Business Cycle Upturn not in Sight. Economic Outlook for 2003 and 2004


  • Markus Marterbauer



The Austrian economy is suffering from persistently weak overall demand. Thus, GDP will expand by only 0.7 percent this year; a tentative projection for 2004 suggests a growth rate of 1.2 percent. Merchandise export growth is currently losing momentum, because of sluggish activity in key trading partner countries and the (mostly indirect) effects of the depreciation of the dollar vis-à-vis the euro. For 2004, the international economic environment does not look significantly more favourable for a cyclical upturn to take hold. Low capacity utilisation and subdued sales expectations weigh on corporate investment plans. The investment-to-GDP ratio has fallen markedly since 2000, and manufacturing output may still not pick up this year. Private consumption is rising but slowly, as disposable incomes post only modest gains and the saving ratio is seen heading up. Only the construction sector shows clear signs of recovery after several years of adverse development. The extended period of slow growth, accompanied by a strong increase in labour supply, is leading to a further rise in unemployment. In 2004, the jobless rate will rise to 7.1 percent of the dependent labour force or 4.4 percent according to Eurostat definitions. Negative cyclical effects will also show up in government households, with the general government deficit edging up to 1.2 percent of GDP. The strong euro exchange rate is dampening inflation; the projected headline inflation of 1.3 percent confirms that a high degree of price stability will be maintained.

Suggested Citation

  • Markus Marterbauer, 2003. "Business Cycle Upturn not in Sight. Economic Outlook for 2003 and 2004," Austrian Economic Quarterly, WIFO, vol. 8(3), pages 71-83, August.
  • Handle: RePEc:wfo:wquart:y:2003:i:3:p:71-83

    Download full text from publisher

    File URL:
    File Function: Abstract
    Download Restriction: Payment required

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    More about this item


    Economic Outlook; Austria;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wfo:wquart:y:2003:i:3:p:71-83. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ilse Schulz). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.