WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

The economy grew more strongly than expected in 2021, due to a significant rise in industrial production, private consumption and exports. However, growth in 2022 is expected to be much weaker, given the threats of high inflation brought about by the war in Ukraine and the rise in local political tensions. The entity governments have failed to reach agreement on decisions that are important to the country’s progress, and this is undermining its prospects for European integration, while also rendering it less attractive to both foreign investors and its own citizens, who are leaving the country in droves.