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

The reconstruction efforts following the floods in August – the worst in decades – will require several billion euro and will take years to complete, boosting government spending. Growth in 2023 will be subdued, at an estimated 1.3%, as private consumption has slowed significantly. Inflation will be high, but is showing clear signs of decreasing. Industrial output will shrink, as manufacturers face reduced foreign demand. The growth in exports will stall, but imports will fall, leading to a positive current account balance. The labour market is very tight, with the unemployment rate at historically low levels.