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

The economy dealt better than expected last year with the blow caused by Russia’s invasion of Ukraine, although inflation reached almost 20%. The economy will shrink in the first half of 2023, but the evident stabilisation in household and business sentiment suggests that consumption and investment activity should pick up thereafter. The government is trying to counter the loss of households’ purchasing power, and public investments should also go some way to supporting economic activity. We expect real GDP to grow by 0.9% in 2023; this will be followed by an upswing to 2.7% in 2024 and then 2.5% in 2025.