IDEAS home Printed from
   My bibliography  Save this article

Growth Slowing Down Further. Economic Outlook for 2005 and 2006


  • Markus Marterbauer



Since late autumn 2004, stimulus from exports is weakening and manufacturing output is losing momentum. Consumer demand from private households has not revived so far. In the second half of 2005, business activity may recover, on the back of an expected stabilisation of exports and industrial production accompanied by somewhat higher consumer spending and construction investment. For the whole year 2005, WIFO projects real GDP to grow by 1.8 percent, markedly below last year's rate of 2.2 percent. Prospects for 2006 are particularly uncertain at the present juncture; the WIFO projections are for growth at a broadly similar pace as in the current year (+1.9 percent). Despite healthy growth of employment, unemployment is set to rise further to a rate of 7.3 percent of the dependent labour force, on account of a strong increase in labour supply. Due to high energy prices, rising housing costs and the increase in the tobacco tax, headline inflation will reach 2.5 percent this year before moderating to 1.9 percent in 2006. Subdued business activity and rising unemployment continue to weigh on public finances, such that the general government deficit may remain broadly unchanged at 1.9 percent of GDP next year.

Suggested Citation

  • Markus Marterbauer, 2005. "Growth Slowing Down Further. Economic Outlook for 2005 and 2006," Austrian Economic Quarterly, WIFO, vol. 10(3), pages 82-92, July.
  • Handle: RePEc:wfo:wquart:y:2005:i:3:p:82-92

    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


    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:2005:i:3:p:82-92. 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.