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

After the fall of the government at the beginning of the year, there is still no clear political solution in sight. Despite a growth rate of 12.4% in 2021, the pre-pandemic GDP level has not yet been reached, leaving further room for growth in 2022. There will be a decline in foreign direct investment, as a result of the sanctions against Russia. Despite rising inflation, household consumption will support growth in 2022, since the ‘Europe Now’ reform programme has led to an unprecedented increase in net earnings. The economy is expected to grow at a rate of 3.5% in 2022, 1 percentage point lower than initially expected.