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

The economy performed worse than expected in H1 2023, and we do not foresee any significant upswing before the end of the year. Since inflation has been declining considerably, real income will pick up again in H2 2023; this will support household consumption – after four consecutive quarters of decline. However, it is only in 2024 that the rise in real incomes will gain momentum. Despite the stagnation, the labour market remains robust. Private investment activity is declining, since external demand is in the doldrums, while the government has considerably raised infrastructure investment. We expect real GDP to decline by 0.1% in 2023; this will be followed by a modest upswing to 1.7% in 2024 and then 2.4% in 2025.