Austrian real GDP growth will accelerate in 2016 but economic activity will lag behind regional peers, despite improving external demand from the eurozone.
On the back of the government's tax reform; we expect household consumption growth to accelerate in the quarters ahead, significantly adding to GDP growth.
At a federal level, support for the Freedom Party (FPO) exceeds that of either the SPO or OVP, which we expect to hold throughout 2016. The FPO is now the junior government coalition member in two Austrian states (Burgenland and Upper Austria).
Lacklustre consumer spending could result in a lower negative contribution from imports. This would bolster growth over the year though we do not feel this could significant deviate from forecasts in 2016 and 2017.
Continually robust support for the far right Freedom Party in 2016 remains a salient political risk consideration.
Slower GDP growth in Germany, Austria's largest export partner, would derail Austria's economic recovery.
|f= BMI forecast Source: BMI/eurostat|
|Nominal GDP, EURbn||334.4||347.6||360.6||375.2|
|Real GDP growth, % y-o-y||0.9||1.8||1.9||1.8|
|Consumer price inflation, % y-o-y, eop||1.2||1.7||2.0||2.5|
|Exchange rate EUR/USD, eop||0.92||0.91||0.87||0.83|
|Budget balance, % of GDP||-1.2||-1.4||-1.1||-1.0|
|Current account balance, % of GDP||2.6||2.8||2.8||2.8|
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