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

After a strong first half year, driven by reopening effects and a boom in tourism, the economy looks set for a much bleaker winter. The boosts to external competitiveness that resulted from the weak lira were short lived and soon erased by inflation, while the main benefits of the rebound in tourism have already been reaped. The extremely high inflation is sharply reducing purchasing power and is putting pressure on industry. Risks are weighted to the downside, including the potential for domestic political noise ahead of the election, rising US interest rates and the geopolitical backdrop.