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

The economy performed worse than expected in 2023, with GDP declining by 0.3%. With the substantial fall in inflation, real incomes had already started to pick up by the end of last year and will continue to do so in 2024; this will support household consumption. Despite the stagnation, the labour market remains robust, and unemployment is likely to decline further. Private investment activity is ailing, since external demand is in the doldrums; meanwhile the government will further raise infrastructure investment. We expect real GDP to increase by 1.6% in 2024; this will be followed by a modest acceleration to 2.2% in 2025 and thereafter to 2.6% in 2026.