## 1autea2025001-print-pdf ## Source details **Canonical URL:** [1autea2025001-print-pdf](https://www.imf.org/-/media/files/publications/cr/2025/english/1autea2025001-print-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2025/english/1autea2025001-print-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2025/english/1autea2025001-print-pdf.pdf.json) --- ### MACROECONOMIC CONTEXT — Recent Developments - Real GDP (SWDA) fell by 1.3 percent in 2024 following a 0.9 percent contraction in 2023. - The economy experienced a second successive year of recession in 2024; growth has significantly underperformed the euro area over the last two years. - Domestic demand was especially weak: - The anticipated recovery in private consumption in 2024 in response to rising real wages failed to materialize. - Household savings rose amid heightened economic uncertainty. - Investment has fallen in response to depressed sentiment and monetary tightening in 2022. - External demand contribution diminished in 2024, in part due to weak activity in key trading partners such as Germany. - Most recent data show output rose by ¼ percent (q-o-q, sa) in 2025Q1. - Manufacturing PMIs remain contractionary and most confidence indicators remain weak. ### Labor Market Developments - Harmonized unemployment rate rose to 5.4 percent in 2024Q4, up from a trough of 4.5 percent in 2022Q2. - The pre-pandemic trend of a rising employment rate has halted. - Hours worked have declined, reaching 1 percent below trend during 2024. - The gap in hours worked together with low manufacturing capacity utilization implies an output gap of around -1 percent. - Job vacancy rates have declined across all sectors. - Real wages rose 5.3 percent in 2024. - Growth in labor productivity (output per hour worked) has been near zero over the last three years. - Staff estimates that the Okun coefficient relating the output gap to the gap in hours worked is about 1. ### Inflation Developments - Headline HICP inflation fell to 2.0 percent (y/y) in 2024Q4. - Headline inflation rose to 3.3 percent in 2025Q1, driven mainly by: - One-off effects from the expiration of electricity price caps for households. - Higher electricity network charges. - A higher carbon price. - Core inflation persisted above headline inflation and was 3.1 percent in 2025Q1. - Services sector inflation was 4.6 percent in 2025Q1. - Nominal wage growth has been elevated at around 7- 8 percent over the past two years. - Both wage growth and inflation have exceeded the euro-area average during this period. ### Fiscal Developments and Public Debt - The deficit widened by 2.1 percentage points to 4.7 percent of GDP in 2024. - The fiscal impulse—change in the cyclically adjusted primary balance—was 0.9 percent of GDP. - Real revenue grew 1.9 percent despite the recession. - Real spending rose by 4 percent due to: - lagged effects of inflation on employee compensation, social benefits, and pensions; - higher interest payments; - the extension of energy measures until end-2024; - increased state and local government deficits; - one-off measures (increase in the “climate bonus”, housing support, back payment of public salaries of €0.8 billion allocated on an accrual basis to 2024 but disbursed in 2025 and 2026, and flood aid). - Debt rose to over 81 percent of GDP. - Selected fiscal time-series (2020–2030 excerpts): - Net lending/borrowing (% GDP): -8.2, -5.7, -3.4, -2.6, -4.7, -4.3, -4.1, -3.9, -3.7, -3.7, -3.6. - General government revenue (% GDP): 49.1, 50.3, 49.7, 50.1, 51.6, 52.0, 52.1, 52.1, 52.1, 52.2, 52.2. - General government expenditure (% GDP): 57.3, 56.0, 53.1, 52.7, 56.3, 56.3, 56.3, 56.0, 55.8, 55.8, 55.8. - Gross debt (Maastricht def.) (% GDP): 83.3, 82.4, 78.4, 78.5, 81.2, 82.8, 84.3, 84.6, 85.2, 85.7, 86.1. - Public debt narrative: - Public debt rose to 81 percent of GDP in 2024 and is projected to continue increasing under the baseline given negative primary balances. - Staff assess low near- and medium-term sovereign stress risk but moderate long-term risk driven by aging-related spending, defense commitments, and green transition needs. ### Financial Sector, Credit, and External Position - Banking capital: CET1 capital ratio reached 17.7 percent by mid-2024. - Liquidity: overall liquidity appears adequate on the Basel LCR measure. - Banking profitability: banks posted high profits in 2024; CESEE operations comprise about 24 percent of Austrian banks’ assets. - Raiffeisen Bank International (RBI) Russian subsidiary contributed about 16 percent of RBI’s consolidated profit for 2024, equivalent to about 1.3 percent of all Austrian banks’ consolidated profits for the year and contributed about 2 ppt to RBI’s consolidated CET1 ratio of 17.1 percent. - NPLs and CRE risks: - CRE loans make up 10 percent of bank assets. - NPL ratio on CRE loans rose to about 5 percent by mid-2024 from 3 percent a year ago. - Provisions against CRE NPLs cover about half of outstanding debt; OeNB estimates loss-given default of 12 percent in the baseline and 35 percent in an adverse scenario. - Stress tests indicate the banking sector is resilient to adverse CRE shocks. - Credit growth: below 1 percent y-o-y in mid-2024; credit gap was negative. Some tentative recovery signs emerged during 2024, including for house purchases. - Current account surplus increased from 1.3 percent of GDP in 2023 to 2.4 percent in 2024. - External position: assessed as broadly in line with the level implied by medium-term fundamentals and desired policy settings. - NIIP and external stocks (2024): - NIIP: 24.2 percent of GDP. - Gross Assets: 1189 percent of GDP. - Debt Assets: 209 percent of GDP. - Gross Liabilities: 1073 percent of GDP. - Debt Liabilities: 393 percent of GDP. ### Outlook and Risks - Growth outlook: - A substantial recovery is likely to be delayed till 2026. - Annual growth in 2025 is expected to remain near zero amid fiscal tightening and heightened global trade uncertainty. - Growth is expected to quicken thereafter as high household savings unwind, investment picks up with monetary easing, housing markets recover, fiscal withdrawal slows from 2026, and external demand improves due to German fiscal easing. - Growth projected to rise above 1 percent for several years and then converge back toward potential growth, assessed to be around ¾ percent. - Inflation outlook: - Headline inflation likely to remain near 3 percent for most of 2025 due to one-off energy-price effects and gradual reduction of core inflation from a negative output gap. - Both headline and core inflation are expected to fall to near 2 percent during 2026 absent significant new shocks. - Risk assessment (tilted to the downside): - External downside risks: escalation of trade policy uncertainty and higher barriers to trade. - Domestic downside risks: persistent weak sentiment slowing recovery; more persistent core inflation undermining competitiveness. - Upside risks: faster unwinding of household savings or trade tensions boosting consumption and investment. - Financial-sector systemic risk: broadly unchanged; CRE downturn persistence and trade tensions pose heterogeneous bank-level risks. - Comparative projections (staff and other institutions; excerpted series 2025–26 and beyond): - Staff projections (2025–26): -0.1, 0.8, 3.2, 1.7 (presented in source table format). - OeNB (Mar 2025): -0.1, 1.2, 2.9, 2.3. - WIFO (Mar 2025): -0.3, 1.2, 2.7, 2.1. - European Commission (May 2025): -0.3, 1.0, 2.9, 2.1. - Consensus forecasts (May 2025): 0.2, 1.1, 2.8, 1.9. ### Policy Discussions — Fiscal Policy and Consolidation - Authorities’ budget proposals for 2025 and 2026 aim to reduce the fiscal deficit with deficit-reducing measures of 1.3 percent of GDP in 2025 and 0.5 percent of GDP in 2026. - Staff assessment: these measures will lower the deficit to around 4.3 percent of GDP in 2025 and 4.1 percent of GDP in 2026. - Corresponding negative fiscal impulse: 1.1 and 0.1 percentage points of GDP in 2025 and 2026, respectively. - Consolidation measures (total deficit-reducing measures): - Billions of euros: 6.4 (2025), 2.3 (2026), 1.8 (2027), 1.4 (2028), 1.5 (2029). - Percent of GDP: 1.3 (2025), 0.5 (2026), 0.3 (2027), 0.2 (2028), 0.3 (2029). - Medium-term fiscal challenge: - Population aging expected to add about 2 percent of GDP to fiscal costs by 2030. - Government coalition commits to increasing defense spending to 2.0 percent of GDP by 2032, up from 0.8 percent of GDP in 2024. - Staff estimate: without substantial spending restraint or new fiscal measures, the deficit would widen over the medium term to around 5½ percent of GDP. - Staff assume an intermediate baseline where medium-term deficits remain in the range of 3-4 percent of GDP. ### Revenue-side Options and Fiscal Room (Potential Annual Net, percentage points of GDP) - Achieving efficiencies in healthcare spending: 1.0 - Reducing energy-intensive subsidies: 0.8 - Increase property tax: 0.8 - Excise tax: 0.6 - Pension reform: 0.4 - Inheritance and gift tax: 0.2 - Enhancing government finance: n.c. - Total: 3.8 - Notes: - Property valuations were last updated in 1973. - Retail gasoline prices in Austria are about US$0.20 per liter lower than in neighboring Germany, suggesting scope to increase fuel excises. - ETS2 is scheduled for introduction in 2027 and will cover buildings, road transport, and small industry. ### Policy Recommendations — Fiscal, Structural, and Financial Sector - Fiscal guidance: - Pursue gradual and high-quality fiscal adjustment that minimizes economic distortions, safeguards growth-enhancing investment, and remains flexible to allow automatic stabilizers to operate if growth disappoints. - Protect spending on investment, R&D, and education while generating savings elsewhere. - Staff estimate fiscal multipliers average around 0.4 for Austria. - Specific spending reforms and efficiency gains: - Contain pension costs: gradually reduce replacement rates for new pensioners and consider gradual increases in retirement age; avoid above-inflation adjustments of pensions. - Increase healthcare efficiency: expand outpatient care, telemedicine, and primary healthcare; spatial planning and structural reforms across levels of government. - Reduce subsidies: eliminate environmentally harmful subsidies (e.g., tax advantages for diesel and commuter allowances). - Contain wage bill: limit public-sector wage increases and enhance multi-level government fiscal contributions. - Revenue measures: - Gradually increase property and inheritance taxes and excise taxes; consider gradual carbon tax increases to fund green transition. - Financial sector and macroprudential policy: - Maintain adequate provisions; use high profits to maintain capital and invest in resilience, including cybersecurity. - Restraint on dividend payouts remains appropriate. - Consider adjusting the bank levy to be based on banks’ liabilities rather than assets. - In a sharp downturn, curtail capital distributions and allow moderate easing of capital requirements to support lending. - In an upswing, increase the CCyB. - Consider legislation to reinstate borrower-based measures under KIM-V as permanent instruments before a potential credit boom. - Continue filling macroprudential CRE data gaps and implement outstanding FSAP recommendations (bank resolution regime, supervisory independence). ### Structural Reforms to Boost Labor Supply and Productivity - Labor supply and demographics: - Austria’s working-age population is projected to decline over the medium term; rising participation and increased retirement age for women will partly offset the drag. - Closing female and elderly labor supply gaps relative to the EU average could offset more than 20 years of demographic aging in terms of GDP effect. - Recommended reforms: - Further expand childcare and eldercare. - Undertake pension reforms that incentivize longer working lives. - Continue efforts to better integrate immigrants into the workforce. - Reduce regulatory burdens, speed up permitting (including for green projects), ease land-use regulations to boost housing supply, and support EU-level measures to deepen capital markets. - Productivity: - Output per hour worked declined at an annual rate of 1 percent over the last 2 years, compared to 0.9 percent per year on average during 2010-19. - Address barriers to entry in services and high administrative burdens to boost firm dynamism. ### External Sector Assessment and Risk Matrix (selected) - External position in 2024 assessed as broadly in line with medium-term fundamentals and desirable policies. - Current account and REER: - Actual CA: 2.4 percent of GDP (2024); Adjusted CA: 2.3 percent; CA norm: 2.5 percent; CA gap: -0.2. - REER appreciated by 2 percent in 2023 and about ½ percent in 2024; REER model estimates suggest overvaluation within a range of 15–20 percent (driven mainly by residuals). - External stocks (2024): NIIP 24.2 percent of GDP; Gross Assets 1189 percent of GDP; Gross Liabilities 1073 percent of GDP. - Risk Assessment Matrix (selected high-likelihood/high-impact items and policy responses): - Trade policy and investment shocks: High / High — policy: support multilateralism; secure supply chains; monitor cross-border financial risks. - Cyberthreats: High / High — policy: banks to build cybersecurity resilience using profits. - Persistent weak sentiment: High / High — policy: allow automatic stabilizers; adopt more gradual consolidation if needed. - Further deterioration in CRE: Medium / Medium — policy: monitor CRE risks; strengthen data; encourage provisioning and capital buffers. ### Debt Sustainability and Stress Metrics (selected figures) - Public debt (selected projection series, actual 2024 then projections): 81.2, 82.8, 84.3, 84.6, 85.2, 85.7, 86.1, 86.7, 87.3, 88.1, 89.0. - Primary deficit series (selected): 3.6, 2.9, 2.6, 2.2, 2.0, 1.9, 1.9, 2.0, 2.1, 2.2, 2.3. - Debt fanchart / GFN indicators (values as presented): - Fanchart width: 28.9 0.4 (percent of GDP). - Probability of debt non-stabilization (percent): 83.2 0.7. - Average baseline GFN 11.8 4.0 (percent of GDP). - GFN financeability index (GFI): 6.3 — Risk signal: 4/Low. - Final assessment: Prob. of missed crisis, 2025-2030, if stress not predicted: 9.1 pct. ### FSAP Recommendations and Implementation (selected) - Ongoing/partial implementation across multiple FSAP recommendations including: - Strengthening FMA resources and AML/CFT staffing (AML/CFT division FTEs: 27.25 in 2024; expected to increase to 44.25). - Enhancements to stress-testing frameworks (FMA/OeNB exercises and top-down tests). - Creation and supervision of Raiffeisen IPS and related mitigation frameworks. - Remaining priorities: clarify BMF role in FMA oversight, phase-out state commissioners in supervisory boards, enhance crisis management tools, and adopt statutory independence measures for supervision (status: no change or NT/MT for several items). *IMF staff report content from the provided PDF chapter.* ### 2025. The mission team comprised Mr. Fletcher (head), Mr. ### 1autea2025001-print-pdf - 2025. The mission team comprised Mr. Fletcher (head), Mr. ### MACROECONOMIC CONTEXT — Recent Developments - Real GDP (SWDA) fell by 1.3 percent in 2024 following a 0.9 percent contraction in 2023. - The economy experienced a second successive year of recession in 2024. - Over the last two years, growth has significantly underperformed the euro area. - Domestic demand was especially weak: - The anticipated recovery in private consumption in 2024 in response to rising real wages failed to materialize. - Household savings rose amid heightened economic uncertainty. - Investment has fallen in response to depressed sentiment and monetary tightening in 2022. - External demand contribution diminished in 2024, in part due to weak activity in key trading partners such as Germany. - Most recent data show output rose by ¼ percent (q-o-q, sa) in 2025Q1. - Manufacturing PMIs remain contractionary and most confidence indicators remain weak. ### Labor Market Developments - Harmonized unemployment rate rose to 5.4 percent in 2024Q4, up from a trough of 4.5 percent in 2022Q2. - The pre-pandemic trend of a rising employment rate has halted. - Hours worked have declined, reaching 1 percent below trend during 2024. - The gap in hours worked together with low manufacturing capacity utilization implies an output gap of around -1 percent. - Job vacancy rates have declined across all sectors. - Real wages rose 5.3 percent in 2024, reflecting lagged adjustments to past inflation and past real wage declines. - Growth in labor productivity (output per hour worked) has been near zero over the last three years. - Staff estimates that the Okun coefficient relating the output gap to the gap in hours worked is about 1. ### Inflation Developments - Headline HICP inflation fell to 2.0 percent (y/y) in 2024Q4 on falling inflation for energy and other goods during 2024. - Headline inflation rose to 3.3 percent in 2025Q1, driven mainly by: - One-off effects from the expiration of electricity price caps for households. - Higher electricity network charges. - A higher carbon price. - Core inflation persisted above headline inflation and was 3.1 percent in 2025Q1. - Services sector inflation was 4.6 percent in 2025Q1. - Nominal wage growth has been elevated at around 7- 8 percent over the past two years. - Both wage growth and inflation have exceeded the euro-area average during this period. ### Figures and Analytical Notes (as presented) - Figure 1: Austria: GDP Growth — shows year-on-year SWDA growth comparisons with the euro area and contributions to GDP growth by expenditure components; 2025Q1 inventory derived from GDP minus other components. - Figure 2: Austria: Labor Market Developments — includes indices and series for real wages, real output per hour, actual vs trend hours worked, unemployment rate and employment rate, and job vacancy rates by industry. - Figure 3: Austria: Inflation Developments — documents headline and core HICP movements and sectoral inflation patterns. *IMF staff report content from the PDF chapter provided.* ### 4. The fiscal deficit deteriorated in 2024 due to the weak economy, lagged effects of ### 4. The fiscal deficit deteriorated in 2024 due to the weak economy, lagged effects of ### Fiscal developments - The deficit widened by 2.1 percentage points to 4.7 percent of GDP in 2024. - The fiscal impulse—measured by the change in the cyclically adjusted primary balance—was 0.9 percent of GDP. - Real revenue grew 1.9 percent despite the recession, partly due to high real wage growth. - Real spending rose by 4 percent due to: - lagged effects of inflation on employee compensation, social benefits, and pensions; - higher interest payments; - the extension of energy measures until end-2024; - increased state and local government deficits; - one-off measures including: - an increase in the “climate bonus”; - implementation of housing support; - the back payment of public salaries following a ruling by the European Court of Justice (note: the ruling mandated back payments totaling €0.8 billion, disbursed in 2025 and 2026 but allocated on an accrual basis to 2024); - flood aid. - Debt rose to over 81 percent of GDP. ### Financial sector, credit, and external position - Banking capital: CET1 capital ratio reached 17.7 percent by mid-2024. - Liquidity: overall liquidity appears adequate on the Basel LCR measure. - Banking profitability: banks posted high profits in 2024, benefiting from strong interest margins and steady profitability from CESEE operations. - CESEE operations comprise about 24 percent of Austrian banks’ assets. - Raiffeisen Bank International (RBI) Russian subsidiary contributed about 16 percent of RBI’s consolidated profit for 2024, equivalent to about 1.3 percent of all Austrian banks’ consolidated profits for the year and contributed about 2 ppt to RBI’s consolidated CET1 ratio of 17.1 percent. - NPLs: - NPLs have risen somewhat in international comparison, driven by higher NPLs on commercial real estate (CRE) loans. - CRE loans make up 10 percent of bank assets. - NPL ratio on CRE loans rose to about 5 percent by mid-2024 from 3 percent a year ago. - Stress tests indicate the banking sector is resilient to adverse CRE shocks. - Provisions against CRE NPLs cover about half of outstanding debt; OeNB estimates loss-given default of 12 percent in the baseline and 35 percent in an adverse scenario. - Credit growth: below 1 percent year-on-year in mid-2024; credit gap was negative. - Some tentative signs of recovery in credit emerged during 2024, including for house purchases. - Current account surplus increased from 1.3 percent of GDP in 2023 to 2.4 percent in 2024, reflecting depressed imports and some improvement in terms-of-trade despite export volume contraction. - External position: assessed as broadly in line with the level implied by medium-term fundamentals and desired policy settings. ### Outlook and risks - Growth: - A substantial recovery is likely to be delayed till 2026. - Annual growth in 2025 is expected to remain near zero amid fiscal tightening and heightened global trade uncertainty. - Growth is expected to quicken thereafter as: - high household savings unwind; - investment picks up as a lagged response to monetary policy easing; - housing markets recover; - fiscal withdrawal slows from 2026 onwards; - external demand improves due to German fiscal easing. - Growth is projected to rise above 1 percent for several years and then converge back toward the potential growth rate, assessed to be around ¾ percent. - Inflation: - Headline inflation likely to remain near 3 percent for most of 2025 due to one-off energy-price effects and gradual reduction of core inflation from a negative output gap. - Both headline and core inflation are expected to fall to near 2 percent during 2026 absent significant new shocks. - Risks (tilted to the downside): - External downside risks: escalation of trade policy uncertainty and higher barriers to trade reducing demand for Austrian exports and increasing import costs. - Domestic downside risks: persistent weak economic sentiment slowing recovery; more persistent core inflation undermining price competitiveness. - Upside risks: faster unwinding of household savings or trade tensions boosting consumption and investment. - Commodity price volatility poses risks in both directions; Austria’s high levels of natural gas reserves should cushion disruptions. - Financial-sector systemic risk: broadly unchanged, with improvements in buffers offset by uncertainty about CRE downturn persistence and heightened risks from global trade tensions; risks may be heterogeneously distributed across banks. - Comparative projections excerpt (staff and other institutions): - Staff projections (2025–26): -0.1, 0.8, 3.2, 1.7 (presented in source table format). - OeNB (Mar 2025): -0.1, 1.2, 2.9, 2.3. - WIFO (Mar 2025): -0.3, 1.2, 2.7, 2.1. - European Commission (May 2025): -0.3, 1.0, 2.9, 2.1. - Consensus forecasts (May 2025): 0.2, 1.1, 2.8, 1.9. ### Policy discussions — fiscal policies and consolidation - Authorities’ budget proposals for 2025 and 2026 aim to reduce the fiscal deficit with deficit-reducing measures of 1.3 percent of GDP in 2025 and 0.5 percent of GDP in 2026. - Measures include abolishing the “climate bonus,” cuts in green subsidies and general ministry expenses, and an increase in the bank levy. - Staff assessment: these measures will lower the deficit to around 4.3 percent of GDP in 2025 and 4.1 percent of GDP in 2026. - Corresponding negative fiscal impulse: 1.1 and 0.1 percentage points of GDP in 2025 and 2026, respectively. - Staff view: - Near-term deficit reduction will support disinflation and slow debt accumulation. - Fiscal policy should remain flexible: allow automatic stabilizers to operate if growth disappoints and protect the most vulnerable. - If weak growth proves structural (not cyclical), more fiscal tightening would be required to stabilize the debt ratio. - Consolidation measures identified in the 2025 and 2026 budgets (Table 3 summary in source; totals): - Total deficit-reducing measures (billions of euros): 6.4 (2025), 2.3 (2026), 1.8 (2027), 1.4 (2028), 1.5 (2029). - Total deficit-reducing measures (in percent of GDP): 1.3 (2025), 0.5 (2026), 0.3 (2027), 0.2 (2028), 0.3 (2029). - Staff source: Ministry of Finance, IMF staff calculations. - Medium-term fiscal challenge: - Population aging expected to add about 2 percent of GDP to fiscal costs by 2030. - Government coalition commits to increasing defense spending to 2.0 percent of GDP by 2032, up from 0.8 percent of GDP in 2024. - Additional public investment likely needed for green transition absent significant increases in carbon taxes. - Staff estimate: without substantial spending restraint or new fiscal measures, the deficit would widen over the medium term to around 5½ percent of GDP. - Staff assume an intermediate baseline where medium-term deficits remain in the range of 3-4 percent of GDP given some spending restraint. - Debt sustainability analysis: low risk of sovereign stress overall but medium-term risk due to rising spending pressures. ### Policy recommendations — structural spending reforms and efficiency - General guidance: gradual and high-quality fiscal adjustment that minimizes economic distortions, safeguards growth-enhancing investment, and flexibly adjusts if risks materialize. - Protect spending on investment, R&D, and education while generating savings in other areas. - Specific areas for savings and reform: - Contain pension costs: - Austria’s pension replacement rates are among the highest in Europe. - Gradually reduce replacement rates for new pensioners and consider gradual increases in retirement age in line with rising life expectancy. - Avoid above-inflation adjustment of pensions. - Achieve efficiencies in healthcare spending: - Austria’s healthy life expectancy is less than one year above other EU countries’ average, but expenditure per capita is 50 percent higher, indicating room for efficiency improvements. - Increase use of outpatient care, telemedicine, and primary healthcare rather than costlier hospital services. - Spatial planning and structural reforms across levels of government and healthcare representatives to better align financing and spending responsibilities. - Reduce subsidies: - In 2023, subsidies from the general government amounted to 2.3 percent of GDP, exceeding the EU average by 0.5 percentage points. - Potential to eliminate environmentally harmful subsidies (e.g., tax advantages for diesel and commuter allowances) and measures introduced during the COVID crisis and high-inflation episode. - Cutting environmentally harmful subsidies could offset adverse effects on carbon emission goals from cuts in green subsidies. - Contain wage bill: - Wage bill is close to 1 percentage point of GDP above its 2019 level and will exceed the EU average in coming years. - Potential reductions by limiting public-sector wage increases and enhancing multi-level government structure. - Additional notes: - Mechanisms should ensure all levels of government contribute equitably to adjustment. - Staff estimate fiscal multipliers average around 0.4 for Austria as a small, open economy. - Staff estimate total investment needs to achieve net zero emissions by 2050 could add between 0.5 and 2.5 percent of GDP to the deficit annually depending on public/private split. *Source: IMF staff report content (Austria).* ### 17. Fiscal space could also be generated on the revenue side while making the tax mix ### 17. Fiscal space could also be generated on the revenue side while making the tax mix more efficient, equitable, and pro-growth ### Revenue-side options and fiscal room - The tax mix remains heavily dependent on labor income despite the 2023 reform that indexed PIT to inflation, and the 2022 eco-social tax, which provided income tax relief and introduced the carbon tax. - Property valuations were last updated in 1973. - Retail gasoline prices in Austria are about US$0.20 per liter lower than in neighboring Germany, suggesting scope to increase fuel excises. - Austria seeks to achieve climate neutrality by 2040. Austria also has 2030 targets for the share of renewables in electricity production and in total energy production, which are 100 percent and 50 percent, respectively. - ETS2 is scheduled for introduction in 2027 and will cover buildings, road transport, and small industry, superseding Austria’s national carbon price. Options for increasing fiscal room (Potential Annual Net, percentage points of GDP) - Achieving efficiencies in healthcare spending: 1.0 - Reducing energy-intensive subsidies: 0.8 - Increase property tax: 0.8 - Excise tax: 0.6 - Pension reform: 0.4 - Inheritance and gift tax: 0.2 - Enhancing government finance: n.c. - Total: 3.8 - Note: “n.c.” indicates measures non-costed. - Increasing property and inheritance taxes and excise taxes could be considered, as these taxes are relatively low by international standards and higher property and inheritance taxes would be progressive. - Gradually increasing the carbon tax could generate additional budgetary resources for green transition investment needs and reduce carbon emissions to help achieve Austria’s climate mitigation goals. ### Authorities’ views on fiscal adjustment - The authorities recognized the pressing need for fiscal adjustment and committed to a frontloaded adjustment aimed at reducing the deficit while limiting adverse effects on growth. - The Fiscal Council estimates that the budgetary impact of measures introduced to support the economy during the COVID crisis and high-inflation episode will average 0.4 percent of GDP between 2027 and 2028. - To reduce expenditures, authorities highlighted ongoing reforms to increase the effective retirement age and lower pension costs, including restrictions to the corridor pension scheme. - To contain healthcare costs, efforts include increasing the use of outpatient and preventive care and consolidating some hospital units in collaboration with state governments. - Authorities are establishing a task force to examine subsidies, including those supporting climate transition, while exploring alternative strategies to meet climate targets and avoid incurring penalties at the EU level. - Authorities are evaluating the distributional implications of Austria’s carbon price and the need for targeted compensatory measures, particularly with the phasing out of the climate bonus and the anticipated higher carbon price under ETS2. - A working group has been set up with municipalities to discuss potential land tax increases. Coalition parties have agreed not to pursue wealth or inheritance taxes. ### Financial sector policies and macroprudential stance - Systemic Risk Buffer (SyRB) was kept at 0.5-1 percent of risk-weighted assets (RWA) in 2024 and extended to one additional bank, making it applicable to 12 systemic institutions (SIs) in all. - The temporary cap on an increase in the combined size of the SyRB and the O-SII buffer (previously set at 0.5 percent of RWA) was removed. - The O-SII buffer now covers the full range of 0.45 to 1.75 percent of RWA for SIs. - A Sectoral Systemic Risk Buffer (SSyRB) set at 1 percent of CRE exposures will become effective in July 2025. - The countercyclical capital buffer (CCyB) remains set at zero given the large negative credit gap and other macroprudential tightening measures. - NFC profits have fallen by around 20 percent over the past two years, which could weaken debt-servicing ability going forward. - Banks’ net interest margins are expected to decline somewhat to more normal levels. - Recommendations: - Banks should maintain adequate provisions and use high profits to maintain capital and invest in resilience, including greater cybersecurity. - Restraint on dividend payouts by banks remains appropriate. - Adjusting the bank levy to be based on banks’ liabilities rather than assets could improve incentives for capital conservation. - In a sharp downturn, curtail capital distributions and allow moderate easing of capital requirements to support lending. - In an upswing with rebounding credit growth, the CCyB should be increased. - Continued efforts are needed to fill macroprudential CRE data gaps (rental returns, debt-service coverage ratios, price indices for CRE asset categories). - Borrower-based measures under the KIM-V regulation will expire in July 2025; these included: - Loan-to-value (LTV) cap of 90 percent - Debt-service-to-income cap of 40 percent - Maturity limit of 35 years on mortgage loans - No more than 20 percent of a bank’s mortgage loans may fall outside these limits - Recommendation: Consider legislation to reinstate these borrower-based measures as permanent, structural instruments before a potential credit boom; attempts to improve housing affordability should focus on boosting housing supply and not on loosening credit standards. - Outstanding FSAP recommendations include adopting legislation to strengthen the bank resolution regime and the statutory independence of financial-sector supervision and regulation. ### Structural policies to boost labor supply and productivity - Austria’s working-age population is projected to decline over the medium term; rising participation rates and increasing retirement age for women will partly offset the drag, but the drag would be larger under low migration scenarios. - Closing female and elderly labor supply gaps relative to the EU average could offset more than 20 years of demographic aging in terms of the effect on GDP. - Options to boost labor supply: - Further expand childcare and eldercare - Undertake pension reforms that incentivize longer working lives - Continue efforts to better integrate immigrants into the workforce - Productivity trends: - Output per hour worked has declined at an annual rate of 1 percent over the last 2 years, compared to positive growth of 0.9 percent per year on average during 2010-19. - Constraints to productivity and firm dynamism: - Higher barriers to entry in certain services and relatively high administrative burdens on business - Relatively low firm dynamism, with entry and exit rates well below the EU 25th percentile - Recommendations to restore productivity growth: - Reduce regulatory burdens and speed up permitting processes, including for green projects - Ease regulatory bottlenecks to increase housing supply (e.g., by easing land-use regulations) - Consider adjusting the regulatory mix for emission reductions and/or replacing the least efficient regulatory measures with increased reliance on carbon taxes - Support further energy market integration within the EU to reduce the level and variability of energy costs ### Financing, regulatory, and growth environment for startups and capital markets - Given a bank-dominated financial sector, financing available to young firms has been mostly in the form of debt; equity market financing has been limited. - Deepening the EU’s Single Market through the Savings and Investment Union would improve availability of equity and other capital market financing for startups. - Solvency II reform could help release additional funds from insurers for venture capital (VC) investments. - The proposed 28th corporate regime could make it easier for growing firms to expand across Europe if properly designed and implemented. - Areas for European-level and domestic action: - Initial Public Offering (IPO) listings: Harmonization of markets regulation in EU member states and consolidation of regional exchanges could provide scale benefits and improve access to equity capital via public offerings. - Investment transparency: Increase transparency into the return, risk, and liquidity of potential VC investments, possibly via development of benchmark indexes, to boost institutional investment. - Within Austria: Review the tax treatment of losses—current tax system does not allow private individuals to carry forward losses on capital assets beyond the year in which the loss is incurred, which may discourage private investment in risky, innovative start-ups. - Innovation ecosystems: Continue promoting collaboration in innovative research between academic institutions and the private sector, building on existing links. *Source: IMF staff chapter text as provided.* ### 28. The authorities broadly shared staff’s views on key priorities for structural reforms. ### The authorities broadly shared staff’s views on key priorities for structural reforms. ### Structural reforms and labor market - Authorities emphasized Austria’s strengths: high human capital, a sound financial sector, and social stability. - Closing female labor supply gaps cited as a priority to boost potential growth; authorities announced further expansion of childcare services, including a second mandatory year of kindergarten. - Commitment to reform the Red-White-Red work permit scheme to better match skilled migration with labor market needs. - Ministries instructed to examine bureaucratic red tape; authorities are working on legislation to consolidate many separate permitting procedures for energy infrastructure into a single assessment while maintaining the rights of all parties. ### Addressing transnational aspects of corruption and AML/CFT issues - Austria continues to tighten focus on transnational aspects of corruption; the new OECD Phase 4 evaluation (2024) noted recent measures to enhance enforcement against foreign bribery and advised further efforts. - Austria is undergoing an IMF staff-led mutual evaluation of its AML/CFT framework, which is expected to be completed by February 2026. - Authorities confirmed close cooperation with Fund staff on the ongoing AML/CFT assessment and noted additional progress such as the updated targeted financial sanctions legal framework and ongoing implementation of new EU legal instruments. - Authorities underscored commitment to implement recommendations of the OECD Phase 4 evaluation. ### Macroeconomic outlook and key risks (staff appraisal) - Austria faces a challenging economic situation after two successive years of recession triggered by the energy-price shock and euro-area monetary tightening. - Growth outlook remains weak for 2025, reflecting sizable planned fiscal consolidation and heightened global trade barriers and uncertainty. - GDP expected to recover more strongly from 2026 onwards under the baseline scenario. - Near-term risks include global trade policy uncertainty and uncertain financial conditions that could affect economic sentiment and demand. - Inflation in 2025Q1 still well exceeds the euro-area average and is only expected to close the gap gradually by end-2026. - Austria’s external position in 2024 assessed as broadly in line with the level implied by medium-term fundamentals and desired policy settings. - Competitiveness could be undermined if productivity-adjusted wage growth persistently exceeds the euro-area average. - Headwinds from population aging and sluggish productivity growth will continue to constrain medium-term growth absent significant reforms. - Major new fiscal adjustment measures needed over the medium term to put the debt ratio back on a downward path while offsetting rising spending pressures from aging, defense, the green transition, and interest payments. ### Near-term fiscal policy guidance - The government’s announced fiscal measures for 2025 are expected to lower the deficit and are sufficient for 2025 given the weak economy. - If near-term downside risks materialize, authorities should let automatic stabilizers operate freely to avoid an excessive drag on growth, with measures deployed to protect the most vulnerable in the event of a severe downturn. ### Medium-term consolidation recommendations - A bold and well-designed package of consolidation measures can yield significant savings over the medium term. - Authorities should aim to cut the deficit to below 2 percent of GDP to put the debt ratio on a declining path. - Options to achieve this while offsetting rising spending pressures include some combination of: - Gradually reducing pension replacement rates (noted as among the highest in the EU). - Limiting public-sector wage increases. - Increasing health-care spending efficiency. - Eliminating environmentally harmful subsidies. - Greater reliance on property, inheritance, gift, and excise taxes (all noted as somewhat low in Austria compared to the European average). - Gradually increasing the national carbon price to generate fiscal resources and prepare for anticipated higher carbon prices under EU ETS2. ### Structural reforms to boost medium- and long-term growth - Boosting labor supply by narrowing the gap in full-time work by females and in labor force participation among elderly workers relative to the EU average could offset more than 20 years of demographic aging in terms of the effect on GDP. - Recommended measures: - Further expanding childcare and eldercare facilities. - Undertaking pension reforms that incentivize longer working lives. - Continuing efforts to better integrate immigrants into the work force. - Cutting red tape in services sectors with high regulatory barriers. - Speeding approval of renewable energy projects. - Reducing regulatory bottlenecks in housing supply, including by easing land-use regulations. - Promoting capital market finance for firms, especially equity financing for young firms at different stages of growth. - Strengthening ecosystems of collaboration between academia and industry. ### EU Single Market and energy integration - Deepening the EU Single Market is critical to improving Austria’s productivity and economic growth; intra-EU trade barriers remain significant. - Suggested reforms include Savings and Investment Union and establishment of harmonized rules for businesses operating in different jurisdictions (described as creating and implementing a well-designed common 28th corporate regime). - Further energy market integration within the EU would help reduce the level and variability of energy costs. - Supporting these EU-level reforms identified as among the most important steps Austria could take to boost productivity and growth. ### Financial sector health and macroprudential policy - Financial sector remains healthy and macroprudential policies broadly appropriate, but continued vigilance on potential credit risks is warranted. - Banks face potential credit risks, including from nonfinancial corporates affected by the rise in global trade barriers and trade policy uncertainty. - Authorities should encourage banks to: - Value collateral conservatively. - Ensure adequate risk provisions. - Remain prudent in profit distributions to build resilience and invest in infrastructure against cyberthreats. - Borrower-based measures for residential real estate lending are set to lapse in July 2025; the new government should consider legislation to adopt these measures as permanent instruments. - Supervisors should remain vigilant that banks adhere closely to proposed lending guidelines replacing borrower-based measures. - CRE measures: introduction of the SSyRB set at 1 percent of CRE assets is welcome; authorities should continue efforts to close macroprudential CRE data gaps. - Current setting of the CCyB at zero remains appropriate given weak credit growth. - Implementing key outstanding recommendations from IMF staff’s 2020 Financial System Stability Assessment would further strengthen financial sector oversight and safety mechanisms. *Source: https://www.imf.org/-/media/files/publications/cr/2025/english/1autea2025001-print-pdf.pdf* ### 37. It is proposed that the next Article IV consultation with Austria take place on the ### It is proposed that the next Article IV consultation with Austria take place on the standard 12-month cycle. ### National accounts and growth outlook - Real GDP (expenditure) (annual percent change): -6.5, 5.0, 5.4, -0.9, -1.3, -0.1, 0.8, 1.6, 1.3, 1.0, 0.8 (2020–2030). - Domestic demand (annual percent change): -5.5, 6.8, 3.8, -3.5, -1.5, 0.2, 0.9, 1.6, 1.2, 1.0, 0.7 (2020–2030). - Contribution to GDP (percentage points): Final domestic demand: -5.3, 5.4, 2.5, -0.7, -0.5, -0.2, 0.8, 1.3, 0.9, 0.8, 0.7 (2020–2030); Net exports: -1.0, -1.7, 1.7, 2.2, 0.1, -0.1, 0.0, 0.1, 0.1, 0.0, 0.1 (2020–2030). - Real GDP (unadjusted) (annual percent change): -6.3, 4.8, 5.3, -1.0, -1.2, -0.1, 0.9, 1.6, 1.2, 1.1, 0.8 (2020–2030). - Investment (% GDP): 25.7, 27.7, 29.2, 25.4, 22.3, 23.4, 23.6, 24.2, 24.7, 25.0, 25.1 (2020–2030). - Gross national savings (% GDP): 29.0, 29.4, 28.4, 26.7, 24.7, 26.1, 26.5, 26.9, 27.2, 27.4, 27.6 (2020–2030). - Potential output growth: 3.9, 4.5, 1.5, 0.4, 0.6, 0.5, 0.6, 0.8, 0.8, 0.8, 0.8 (2020–2030). - Output gap (% potential GDP): -1.9, -1.6, 2.1, 0.7, -1.1, -1.8, -1.5, -0.7, -0.3, 0.0, 0.0 (2020–2030). ### Labor market - Labor force (annual percent change): -0.4, 1.2, 1.6, 1.3, 0.3, 0.2, 0.2, 0.2, 0.2, 0.2, 0.2 (2020–2030). - Employment (annual percent change): -1.3, 0.2, 3.2, 0.7, -0.1, 0.0, 0.3, 0.4, 0.3, 0.2, 0.2 (2020–2030). - Wages (hourly) (annual percent change): 5.9, 0.9, 5.1, 7.7, 8.8, 3.2, 4.3, 3.6, 2.8, 2.5, 2.4 (2020–2030). - Unemployment rate, EU harmonized (% labor force): 5.5, 6.2, 4.7, 5.1, 5.4, 5.6, 5.5, 5.3, 5.3, 5.2, 5.2 (2020–2030). - Unemployment rate, national definition (% labor force): 10.0, 8.0, 6.3, 6.4, 7.0, 7.2, 7.1, 6.9, 6.8, 6.8, 6.8 (2020–2030). ### Prices and inflation - Consumer prices (average): 1.4, 2.8, 8.6, 7.7, 2.9, 3.2, 1.7, 2.2, 2.1, 2.1, 2.1 (2020–2030). - Consumer prices (end of period): 1.0, 3.8, 10.5, 5.7, 2.1, 2.7, 2.1, 2.2, 2.1, 2.1, 2.1 (2020–2030). - Core CPI (eop): 1.6, 2.2, 8.8, 6.0, 3.1, 2.5, 2.1, 2.1, 2.1, 2.1, 2.1 (2020–2030). - GDP deflator: 2.6, 1.9, 4.8, 6.6, 3.1, 3.3, 2.0, 2.2, 2.0, 2.0, 2.1 (2020–2030). ### Macro-financial indicators - Broad money (annual percent change): 10.1, 2.7, 5.2, -0.1, 4.3, 3.0, 3.2, 3.8, 3.3, 3.2, 3.0 (2020–2030). - Credit to the private sector (annual percent change): 3.7, 6.9, 6.2, 0.2, 0.5, 1.1, 2.0, 3.4, 3.3, 3.2, 3.0 (2020–2030). - Corporations: 4.1, 8.3, 8.7, 2.3, 1.7, 2.0, 2.7, 3.8, 3.3, 3.2, 3.0 (2020–2030). - Households: 3.4, 5.5, 3.6, -1.9, -0.9, 0.0, 1.2, 2.8, 3.3, 3.2, 3.0 (2020–2030). ### General government finances and fiscal outlook - General government revenue (% GDP): 49.1, 50.3, 49.7, 50.1, 51.6, 52.0, 52.1, 52.1, 52.1, 52.2, 52.2 (2020–2030). - General government expenditure (% GDP): 57.3, 56.0, 53.1, 52.7, 56.3, 56.3, 56.3, 56.0, 55.8, 55.8, 55.8 (2020–2030). - Net lending/borrowing (% GDP): -8.2, -5.7, -3.4, -2.6, -4.7, -4.3, -4.1, -3.9, -3.7, -3.7, -3.6 (2020–2030). - Structural balance (% potential GDP): -7.1, -4.8, -4.5, -3.0, -4.1, -3.3, -3.4, -3.6, -3.6, -3.7, -3.6 (2020–2030). - Gross debt (Maastricht def.) (% GDP): 83.3, 82.4, 78.4, 78.5, 81.2, 82.8, 84.3, 84.6, 85.2, 85.7, 86.1 (2020–2030). - Primary balance (% potential GDP): -7.1, -4.8, -2.7, -1.8, -3.6, -2.9, -2.6, -2.2, -2.0, -1.9, -1.9 (2020–2030). - Interest (% GDP): 1.4, 1.1, 1.0, 1.2, 1.5, 1.7, 1.9, 2.1, 2.3, 2.5, 2.6 (2020–2030). ### Balance of payments and external sector - Current account balance (% GDP): 3.4, 1.7, -0.9, 1.3, 2.4, 2.6, 2.9, 2.7, 2.5, 2.4, 2.4 (2020–2030). - Exports of goods and services (% GDP): 51.6, 56.1, 61.9, 59.4, 57.4, 54.1, 54.2, 54.1, 53.9, 53.8, 54.0 (2020–2030). - Imports of goods and services (% GDP): 48.3, 55.3, 62.5, 57.4, 54.5, 51.0, 50.9, 50.9, 50.9, 51.0, 51.1 (2020–2030). - Net international investment position, net (% GDP): 11.5, 14.4, 16.1, 16.6, 24.2, 25.9, 27.9, 29.3, 30.7, 31.9, 33.3 (2020–2030). - Export volume (goods and services) (annual percent change): -10.5, 9.5, 10.0, -0.4, -4.3, -0.7, 0.7, 2.4, 2.4, 2.2, 2.2 (2020–2030). - Import volume (goods and services) (annual percent change): -9.6, 14.1, 7.1, -4.6, -5.0, -0.6, 0.8, 2.5, 2.4, 2.4, 2.2 (2020–2030). ### Key nominal and demographic items (memorandum) - Nominal GDP (billions of euro): 380.3, 406.2, 448.0, 473.2, 481.9, 496.7, 510.8, 530.7, 548.6, 565.5, 582.0 (2020–2030). - Population (millions): 8.9, 8.9, 9.0, 9.1, 9.2, 9.2, 9.2, 9.2, 9.3, 9.3, 9.3 (2020–2030). - GDP per capita (U.S. dollars): 48,764, 53,827, 52,587, 56,216, 56,938, 58,252, 60,089, 62,205, 64,087, 65,862, 67,617 (2020–2030). ### Fiscal accounts (detailed composition, selected items) - Tax revenue (% GDP): 26.8, 28.1, 28.3, 28.0, 28.5, 28.6, 28.7, 28.7, 28.7, 28.8, 28.8 (2020–2030). - Personal income tax (% GDP): 9.5, 10.0, 9.8, 9.6, 9.8, 9.6, 9.7, 9.7, 9.8, 9.9, 9.9 (2020–2030). - Corporate income tax (% GDP): 2.2, 2.8, 3.5, 3.4, 3.5, 3.4, 3.4, 3.3, 3.3, 3.3, 3.3 (2020–2030). - Social contributions (% GDP): 16.2, 15.9, 15.3, 15.5, 16.4, 16.7, 16.8, 16.8, 16.8, 16.8, 16.8 (2020–2030). - Expense (% GDP): 53.9, 52.4, 48.8, 48.9, 52.3, 52.4, 52.2, 51.7, 51.5, 51.3, 51.6 (2020–2030). - Acquisition of nonfinancial assets (% GDP): 3.4, 3.6, 4.3, 3.8, 4.0, 3.9, 4.1, 4.2, 4.4, 4.5, 4.5 (2020–2030). - Net financial worth (% GDP): -60.7, -54.3, -44.2, -45.3, -45.8, -45.9, -45.3, -44.6, -44.1, -43.6, -43.2 (2020–2030). ### Financial soundness and banking sector - Regulatory capital to risk-weighted assets: 18.0, 18.8, 18.8, 18.9, 19.7, 19.2, 19.4, 20.6, 20.8 (2016–2024 series context). - Tier 1 capital to risk-weighted assets: 14.5, 15.6, 16.3, 16.5, 17.4, 17.1, 17.5, 18.7, 18.6 (2016–2024 series context). - Nonperforming loans to total gross loans: 2.7, 2.4, 2.9, 2.4, 2.4, 2.1, 2.0, 2.5, 2.9 (2016–2024 series context). - Return on assets and equity: Return on assets around 0.6–1.4 (2016–2024 context); Return on equity up to 12.0 (2016–2024 context). - Net interest margin (basis points): series ranging from 190.0 to 241.9 (2016–2024 context). - Liquidity indicators: Liquid assets to total assets and to short-term liabilities generally high and stable (series reported). ### Depository corporations and monetary aggregates (selected) - Broad money (levels and percent changes shown in detailed tables): Broad Money levels and year-on-year changes recorded (series 2019–2024). - Net foreign assets and net domestic assets: series reported with notable swings (Net Foreign Assets and Net Domestic Assets, 2019–2024). - Claims on private sector and sectoral breakdowns: Corporates and households claims series reported. ### Key graphical findings and developments (figures summary) - Real sector: 2023–24 recession especially deep in construction and manufacturing; capacity utilization remains low; manufacturing outlook contractionary; weak demand cited by firms. - External developments: Current account increased in 2024 driven by import weakness; imports from non-EU partners fell sharply; tourist arrivals nearly recovered to pre-COVID levels; real effective exchange rate has appreciated since 2022; net IIP has increased steadily. - Fiscal developments: Public debt rising; large fiscal impulse in 2024; spreads remained stable supported by active debt management extending maturities and promoting green bond issuance; population aging and high ageing costs. - Financial sector: Credit growth recovering including house purchase loans; regulatory capital and Tier 1 ratios strengthened; liquidity stable with adequate LCR; asset quality weakened recently but provisioning appears adequate; profitability high by cross-country and historical standards. - Macrofinancial: Household debt relatively low and falling relative to income; non-financial corporate debt moderate though weaker profits may strain servicing for some firms; housing investment weak but signs of bottoming out. *Sources: Authorities' data, and IMF staff estimates and projections.* ### Annex I . External Sector Assessment ### Annex I . External Sector Assessment ### Overall Assessment - The external position of Austria in 2024 is assessed to be broadly in line with the level implied by medium-term fundamentals and desirable policies. - Potential Policy Responses: - Fiscal consolidation will help support disinflation and avoid a persistent inflation differential with the euro area, which over time could undermine competitiveness and external balance. ### Foreign Assets and Liabilities: Position and Trajectory - Background: - The net international investment position (NIIP) rose from 16.6 percent of GDP in 2023 to 24.2 percent of GDP in 2024. - Assets to GDP increased by 15 percentage points mainly on portfolio (mainly equity) investments and to a lesser degree on debt. - Liabilities to GDP increased by 8 percentage points, mainly due to increases in portfolio debt liabilities. - Assessment: - In 2024 the NIIP increased in response to the current account surplus, with a larger increase in assets than in liabilities. - The NIIP is projected to rise gradually over the medium term in line with projected current account surpluses around the norm for Austria. - Key 2024 (% GDP) statistics: - NIIP: 24.2 - Gross Assets: 1189 - Debt Assets: 209 - Gross Liabilities: 1073 - Debt Liabilities: 393 ### Current Account - Background: - Austria’s current account recorded a surplus 1.3 percent of GDP in 2023 as import volumes fell by 4½ percent amidst economic contraction while export volumes remained broadly unchanged. - Export and import volumes both contracted in 2024, by around 4¼ and 5 percent respectively. - Following the steep decline in import and export prices in 2023, export prices recovered somewhat quicker in 2024 than import prices. - The improvement in Austria’s terms of trade helped increase the current account balance to 2.4 percent of GDP. - Assessment: - Adjusting for cyclical factors (terms of trade and output gap) based on the IMF’s EBA estimates, the current account balance in 2024 stood at 2.3 percent of GDP, slightly lower than the estimated current account norm of 2.5 percent of GDP. - The relative policy gap of -0.1 percent of GDP reflects offsetting effects of the credit gap (+0.2) and health expenditure (-0.3). - The estimated current account gap implies an estimated gap of 0.4 percent of the REER from the level consistent with fundamentals and desired policy settings. - Model summary (selected values): - Actual CA: 2.4 - Cyclical contributions: 0.3 - Additional cyclical/temporary factors: -0.2 - Adjusted CA: 2.3 - CA norm: 2.5 - CA gap: -0.2 - o/w relative policy gap: -0.1 - Elasticity: 0.44 - REER gap (in percent): 0.4 14.5 19.6 ### Real Exchange Rate (REER) - Background: - The REER appreciated by 2 percent in 2023, and the pace of appreciation slowed in 2024 to be about ½ percent. - Assessment: - The REER index and REER level model estimates suggest that the REER was overvalued within a range of 15–20 percent. However, these estimates are driven mainly by sizable residuals. ### Capital and Financial Accounts; FX Intervention and Reserves - Capital and Financial Accounts: - Background: - The financial account posted net outflows of about 1 percent of GDP in 2023. - In 2024, the financial account net outflows amounted to 1½ percent of GDP, in line with the size of the current account surplus after accounting for capital account net outflows of about ¼ percent of GDP and errors and omissions. - Assessment: - Risks are limited, given the strength of Austria’s external position. - FX Intervention and Reserves: - Background: - The euro has the status of a global reserve currency. - Assessment: - Reserves held by euro-area countries are typically low relative to standard metrics. The currency floats freely. ### Annex II — Risk Assessment Matrix (selected material) - Global risks (likelihood / impact / policy responses): - Trade policy and investment shocks: High / High - Impact: Hurt Austria's export sectors; pose risks for Austrian banks with substantial presence in CESEE. - Policy responses: Participate in global initiatives to support multilateralism; secure supply chains; monitor cross-border financial sector risks; further de-risk financial sector including by building banks’ capital buffers. - Commodity price volatility: Medium / Medium - Impact: Resumed high inflation; lower growth; rising social tensions. - Policy responses: Accelerate renewable energy production; provide targeted fiscal support for vulnerable households in the event of large shocks. - Regional conflicts: Medium / Medium - Impact: Lower consumption and production, especially in energy intensive industries; increased systemic risks; Red Sea trade disruptions could increase inflation and disrupt production and trade. - Policy responses: Continue to diversify energy sources; allow automatic stabilizers to operate; provide targeted support to vulnerable households; carefully monitor financial sector developments and increase buffers. - Cyberthreats: High / High - Impact: Could compromise the safety of the Austrian financial system and disrupt activity. - Policy responses: Banks should use recent high profits to build resilience against cybersecurity threats. - Climate change: Medium / Medium - Impact: Lower growth due to weaker winter tourism exports. - Policy responses: Diversify the tourism export base; rebuild damaged infrastructure. - Domestic risks (likelihood / impact / policy responses): - Persistent weak sentiment: High / High - Impact: Households postpone consumption; firms delay investment. - Policy responses: Allow automatic stabilizers to operate; if economy weakens considerably, adopt a more gradual pace of structural fiscal consolidation. - Faltering domestic reforms: Medium / Medium - Impact: Weaker medium-term growth. - Policy responses: Implement reforms to boost labor supply among women and elderly, remove regulatory barriers to increase housing supply and investment in renewable energy, identify fiscal reforms to sustainably lower deficits and debt. - Persistent inflation above the euro-area average: Medium / Medium - Impact: Could undermine Austrian export competitiveness and external balance. - Policy responses: Accelerate fiscal tightening if the output gap turns positive and core inflation persists above the euro-area average; promote wage settlements consistent with inflation converging to the 2 percent target. - Further deterioration in the commercial real estate sector: Medium / Medium - Impact: Potential risks to banks’ profits and tighter financial conditions. - Policy responses: Closely monitor CRE-related risks; strengthen availability of macroprudential data on CRE; encourage banks to maintain adequate provisions and capital buffers, including restraint on dividends and executive bonus payouts. - Contagion from CESEE countries: Medium / High - Impact: Could negatively impact Austrian banks’ profitability; sanctions-related risks for operations in certain countries. - Policy responses: Adjust bank-wise systemic risk buffers as needed; carefully monitor and mitigate sanctions-related risks. ### Annex III — Public Sector Debt Sustainability Assessment (selected material) - Overall assessment: - Overall: Low (risk of debt distress is assessed as low; debt is considered sustainable). - Near term: Low - Medium term: Low - Long term: Moderate - Key findings and projections: - Commentary: Following an increase of approximately 10 percent of GDP during the COVID-19 pandemic, Austria’s public debt-to-GDP ratio declined to 77.7 percent in 2023, before rebounding to 81 percent in 2024 due to the recession and a fiscal deficit resulting from the full realization of inflation effects and the impact of one-off measures. - Medium-term risks are assessed as low reflecting the GFN mechanical signal and the conservative projection of the primary deficit in the medium-term, Austria's stable and diversified investor base, relatively long average debt maturity, strong institutions, and euro-denominated debt. - Long-term risks are assessed as moderate as aging-related expenditures on health and social security are expected to increase and feed into debt dynamics. - The European Commission estimate the total cost of ageing for Austria to reach 30.2 percent of GDP in 2070, 2.6pp higher than in 2022. - Commentary notes that the baseline projection for Austria's primary deficit is conservative and does not fully incorporate consolidations required by the EU fiscal rules. - Selected public debt projections and indicators (exact values from table): - Public debt: 81.2 82.8 84.3 84.6 85.2 85.7 86.1 86.7 87.3 88.1 89.0 (actual 2024 then projection) - Change in public debt: 2.7 1.6 1.5 0.3 0.6 0.5 0.5 0.6 0.7 0.8 0.9 - Primary deficit: 3.6 2.9 2.6 2.2 2.0 1.9 1.9 2.0 2.1 2.2 2.3 - Noninterest revenues: 51.2 51.7 51.8 51.6 51.6 51.5 51.3 51.3 51.3 51.3 51.3 - Noninterest expenditures: 54.8 54.5 54.4 53.9 53.5 53.3 53.2 53.3 53.4 53.5 53.6 - Automatic debt dynamics: -1.4 -0.9 -0.8 -1.5 -0.9 -0.7 -0.5 -0.5 -0.5 -0.4 -0.4 - Real GDP growth (percent): -1.2 -0.3 0.9 1.6 1.2 1.1 0.8 0.8 0.8 0.8 0.8 - Inflation (GDP deflator; percent): 3.1 3.3 2.0 2.2 2.0 2.0 2.1 2.1 2.1 2.1 2.1 - Nominal GDP growth (percent): 1.8 3.1 2.9 3.9 3.2 3.1 3.0 3.0 3.0 3.0 3.0 - Effective interest rate (percent): 0.0 1.9 1.9 2.1 2.2 2.3 2.3 2.4 2.4 2.5 2.5 - Debt structure commentary: - Public debt is denominated in local currency and is marketable. - The share held by the central bank has increased from zero in 2014 to 21 percent in 2024, while the share of external private creditors has decreased from 54 percent in 2014 to 35 percent in 2024. - The average maturity of the debt is 11.4 years, the highest in the EU. - Over 90 percent of the debt carries fixed interest rates, and less than 20 percent is short-term. - Overall conclusion: - Austria’s risk of debt distress is assessed as low, with sustainability supported by a conservative baseline, long debt maturity, stable investor base, strong institutions, and euro-denominated debt. Over the longer term, aging-related spending, defense spending, and investment needs for the green and digital transition will require additional deficit-reducing measures to stabilize debt. *Source: Annex I, II, and III of 1autea2025001-print-pdf - External Sector Assessment (IMF).* ### Annex III. Figure 4. Austria: Baseline Scenario ### Annex III. Figure 4. Austria: Baseline Scenario ### Commentary and projection summary - Public debt rose to 81 percent of GDP in 2024. - It is projected to continue increasing over time, reflecting a projected primary balance that continues to remain negative, based on the baseline scenario. - Commentary: Both the Debt Fanchart Module and GFN Financeability Module suggest a low level of medium-term risk. - Source: IMF staff estimates and projections. ### Medium-term projection — contribution to change in public debt (Percent of GDP) - Chart timeframe displayed: 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 (x-axis labels as shown). - Cumulative contributions categories shown: Primary deficit; Real Interest rate and relative inflation; Real GDP growth; Exch. rate depreciation; Other flows. - Example cumulative labeled values in figure area: 0, -8, -8, 0, 24, 9, -20, -15, -10, -5, 0, 5, 10, 15, 20, 25, 30 (values as presented on chart axes and markers). ### Debt fanchart module and key indices (values as presented) - Value Contrib 1/ - Final Fanchart (Percent of GDP) Debt fanchart module - Fanchart width 28.9 0.4 (percent of GDP) - Probability of debt non-stabilizaiton (percent) 83.2 0.7 - Term inal debt-to-GDP x 19.8 0.4 - institutions index Debt fanchart index (DFI) 1.5 - Risk signal: 3/Mode rate ### Gross financing needs (Percent of GDP) — GFN module (values as presented) - Gross financing needs (GFN) module - Average baseline GFN 11.8 4.0 (percent of GDP) - Initial Banks' claims on the gen. govt (pct bank assets) 3.8 1.2 - Chg. In banks' claims in stress (pct banks' assets) 3.2 1.1 - GFN financeability index (GFI) 6.3 - Risk signal: 4/Low ### Medium-term index and risk signals (values and probabilities) - Medium-Term Index (Index Number): Value, Weight, Contribution reported with components including Debt fanchart index 1.5 and GFN finaceability index 6.3. - Risk signal: 5/ - Final assessment: Prob. of missed crisis, 2025-2030, if stress not predicted: 9.1 pct. - Prob. of false alarms, 2025-2030, if stress predicted: 45.5 pct. ### Triggered stress tests and notes - Triggered stress tests (stress tests not activated in gray) — indicator shown in figure legend. - Notes included in figure: 1/ See Annex IV of IMF, 2022, Staff Guidance Note on the Sovereign Risk and Debt Sustainability Framework for details on index calculation. 2/ The comparison group is advanced economies, non-commodity exporter, surveillance. 3/ The signal is low risk if the DFI is below 1.13; high risk if the DFI is above 2.08; and otherwise, it is moderate risk. 4/ The signal is low risk if the GFI is below 7.6; high risk if the DFI is above 17.9; and otherwise, it is moderate risk. 5/ The signal is low risk if the GFI is below 0.26; high risk if the DFI is above 0.40; and otherwise, it is moderate risk. ### Visual/percentile information included in figure - Small graphical values/labels appearing in the figure area: 0.3 0.5 0.2; 0.1 0.5 0.1; 0 25 50 (percentile in peer group 2/); 0 25 50 75 100 (percentile scales as shown). - Normalized value axis entries displayed: 0 25 50 75 100 (percentile in peer group 2/). - Color/legend indicators and percentile scales referenced for peer-group comparisons. *Source: IMF staff estimates and projections.* ### Annex V. 2020 FSAP Key Recommendations—Implementation ### Annex V. 2020 FSAP Key Recommendations—Implementation ### Financial Sector Oversight - Recommendation: Review legislation to clarify and narrow the BMF’s role in oversight of the FMA and remove industry participation in its Supervisory Board. - Time Frame: MT - Status: No change. - Recommendation: Make the OeNB the chair of FMSB and increase its voting representation. - Time Frame: NT - Status: No change. - Recommendation: Strengthen related party risk framework and establish ex-ante approval for LSI significant investments in non-financial undertakings. - Time Frame: NT - Status: The Austrian authorities (FMA/OeNB) reiterate that a change in EU legislation is a prerequisite for legislation change in Austria. - Recommendation: Phase-out the role of state commissioners in supervisory boards. - Time Frame: MT - Status: No change. - Recommendation: Enhance internal guidelines for supervisory action based on qualitative factors. - Time Frame: I - Status: The FMA's internal SREP manual is being continuously updated. The SREP will continue to be developed towards a more risk-based approach, providing focus and guidance for deepening certain (risk) areas, e.g. on the basis of qualitative factors/findings. Further efforts are being made to improve the formats of supervisory communication, the so-called structured dialogue, and its linkage with the SREP. In addition, training and guidance for supervisors is being constantly improved. - Recommendation: Stress-test insurance segments / business lines with material future profitability and follow-up with appropriate actions, such as capital add-on. - Time Frame: NT - Status: The FMA continues to focus also on business lines with material future profitability within its stress-testing framework and follow-up with appropriate actions. - FMA 2024 bottom-up stress-test components: - (i) Sudden increase in interest rates and inflation with simultaneous mass lapses. This stress test comprises a joint solvency and liquidity assessment. - (ii) A simplified top-down solvency stress test for all solo undertakings: results showed a higher sensitivity of assets than liabilities triggering a decline in own funds and confirmed the volatile results for insurers with highly profitable business lines. - (iii) Asset price shock triggered by the perception of climate transition risks and macroeconomic shocks: sector-wide top-down stress test for insurers and pension funds including look-through data on assets within investment funds and computed based on a cash-flow approach for fixed income assets. - Details of tests were published in the report on the state of the Austrian insurance industry 2024 (FMA, Bericht über die Lage der Österreichischen Versicherungswirtschaft 2024), especially on p. 12ff regarding the top-down stress test and on p. 49ff regarding the climate stress test. - The FMA is evaluating a national roll-out of stress tests for financial conglomerates. - Recommendation: Review resources for the maintenance of Solvency II, insurance market conduct supervision and potential recovery and resolution framework, and AML supervision for all entities, including VASPs. - Time Frame: NT - Status: - Insurance supervision: the FMA continuously reviews resources for the maintenance of Solvency II, insurance market conduct supervision, and potential recovery and resolution framework. - AML division staffing and structure: - In 2022, the FMA hired 4 additional full-time employees. - In 2024, 5 more FTEs were hired, amounting to 27.25 FTEs. - The number of FTEs is expected to further increase gradually to 44.25 in anticipation of the implementation of the new EU AML/CFT framework and the gradual takeover of new duties in the monitoring of international financial sanctions starting in 2026. - As of January 2025, the AML/CFT division consists of three teams: - “Team On-Site Inspections” — exclusively responsible for conducting on-site inspections and on-site examinations. - “Team Enforcement” — tasked with the conduct of all off-site measures including investigation proceedings, (follow-up) proceedings to restore legal compliance, and assessing and answering legal enquiries by obliged entities. - “Analysis, Strategy and Coordination” — focuses on the FMA’s AML/CFT risk assessment and supervisory strategy, and coordination of national and international AML/CFT matters. - Recommendation: Revise AML/CFT risk scoring reflecting cross-border risks, increase onsite inspections of low-risk banks, branches and subsidiaries and improve non-EU/EEA information exchange. - Time Frame: NT - Status: - The FMA's risk scoring toolkit includes quantitative and qualitative data to properly capture risks. - (i) Qualitative data include audit reports, results from previous on-site inspections and off-site measures as well as other perceptions (e.g., media reports, information provided by the prudential team). Cross-border risk monitoring includes qualitative data and the number of branches and subsidiaries in every country, which serves in the risk score in each country. - (ii) The FMA increased the frequency of onsite supervision for low-risk institutions by Q4/2020 to raise awareness on AML and assess frameworks; evaluation concentrated on transactions by customers of typically small and regional banks. - (iii) The FMA increased OSIs dealing with group-wide policies within parents and in foreign branches and subsidiaries. At the start of the Covid-19 crisis, risk-based onsite inspections extended also to insurance companies where AML/CFT risk is deemed minor. Routine inspections are set to resume with remote and/or hybrid teams. - (iv) Non-EU/non-EEA exchange of information: improvement of cross-border information exchange is ongoing. The FMA has explicit legal basis to share information. MoUs help practical modalities. The FMA updated its MoU for insurance supervision with Montenegro in 2022; the United Arab Emirates is seeking to engage the FMA on a MoU, where a symmetrical involvement for EBA will be needed for an equivalence assessment. - EBA equivalence initiatives and timelines: - For some non-EEA countries (majority of Austrian banks’ subsidiaries), an AML-related EBA equivalence assessment has not been conducted yet. - The FMA initiated with the EBA to prioritize non-EEA countries’ equivalence assessments. As a result the EBA launched the assessment of the National Bank of Serbia, the Monetary Authority of Singapore, the Central Bank of Montenegro, and the Australian Transaction Reports and Analysis Center with participation of three Austrian members in June 2024. Questionnaires to the assessed authorities have been sent by the EBA. - The assessment of the Central Bank of Montenegro is going to be finalized in Q2 2025. - The FMA hosted an inaugural High Level AML College Conference in September 2023 attended by 17 authorities from 14 countries; the Central Bank of Hungary hosted the 2nd College Conference in November 2024 with participation of 16 authorities from 13 countries. It is intended to hold the conference also in 2025. - Recommendation: Monitor the effectiveness of the FMSB’s sustainable lending guidance and prepare regulatory actions, such as binding macroprudential limits, if the risk profile does not improve. - Time Frame: NT - Status: - Binding measures to contain systemic risks from residential real estate funding (limits on DSTI, LTV and maturities) were introduced in 2022. - At the beginning of 2023 these measures were adapted (exemptions of bridge funding, absolute minimum exemption buckets). - Following the introduction of legally binding measures, lending standards have markedly improved, while the guidance active before had not led to material changes. - Borrower-based measures for mortgage lending expire as of June 30, 2025. - FMSB approved/supports accompanying measures for sustainable lending standards: - (i) Guideline on lending standards: loan-to-collateral ratio should not exceed 90 percent; debt service-to-income ratio should not exceed 40 percent; maximum maturity should not exceed 35 years. The proportion of loans not meeting these criteria should not exceed 20 percent of new lending in any given quarter. - (ii) Increased reporting frequency: the FMA will change the VERA-H reporting frequency to require quarterly data. - (iii) Additional information: the OeNB will regularly publish details of trends in lending. - (iv) Capital-based measures: the FMSB will, in collaboration with the FMA and the OeNB, evaluate capital-based measures at upcoming meetings. - Recommendation: Enhance oversight of inward spillover risks from the inverse ownership structure of the Raiffeisen sector. - Time Frame: NT - Status and measures taken: - An Austrian sector-wide Raiffeisen-IPS-System was established by end-May 2021; almost the entire Raiffeisen sector joined (only two small Raiffeisen primary banks initially not part of the IPS). - The previous Bundes-IPS and six Landes-IPSes were dissolved. - The Raiffeisen-IPS established its own deposit guarantee and investor compensation scheme (DGS); the ÖRS is the responsible entity of the Raiffeisen-IPS for operating the DGS. - By end of 2024 the two small Raiffeisen banks not previously members joined the Raiffeisen-IPS, leading to 100 percent coverage of Raiffeisen banks by the IPS. Approval procedures regarding Art. 113 para 7 and Art. 49 para 3 of the CRR were conducted by the FMA and ECB. - ECB and FMA specified R-IPS obligations regarding stress testing: stress scenarios shall cater for material idiosyncratic and systemic risks; R-IPS shall consider (i) the extent to which internal spillover effects between R-IPS entities resulting from potential support cases will exhaust R-IPS support capacity, and (ii) how the R-IPS, when confronted with an extreme support case depleting its support capacity, would ensure compliance with regulatory requirements for all members and the R-IPS as a whole. - Supervisory activities: FMA (and ECB regarding SIs) constantly monitor specific risks of the Raiffeisen sector with focus on IPS supervision. Regular meetings occur between FMA/OeNB staff and auditors, management bodies, and ÖRS. Conditions and reporting obligations were imposed as part of the approval process, including regular submission of risk reports and ad hoc reporting obligations in the event of material financial deterioration. - A Raiffeisen IPS simulation tool has been activated to simulate failing member banks and assess IPS capacity to recover such fallouts. - In 2024, the OeNB undertook a systemic risk analysis of the Austrian IPSs (Raiffeisen IPS and Sparkassen IPS) to assess systemic impact of potential IPS measures; this analysis allows consistent treatment of Raiffeisen IPS within OeNB’s systemic risk assessments for macroprudential buffer calibration. - Since 2023, the FMA has developed a comprehensive mitigation framework to safeguard any future FOLF and resolution of a LSI RLB from potential follow-up failures of Raiffeisen primary institutions. The FMA is preparing to finalize negotiations with the LSI RLBs and reach first implementation of this framework in RPC 2025. ### Financial Stability Analysis - Recommendation: Close data gaps, including in the real estate and non-financial corporate (NFC) sectors, and improve coverage and granularity of CESEE data. - Time Frame: MT - Status and actions by OeNB: - (i) Data gaps in the real estate and nonfinancial corporate sectors were tackled for residential real estate; implementation is ongoing for commercial real estate. For commercial real estate some data gaps are being closed via AnaCredit data and a commercial real estate price index (forthcoming). Other gaps, such as income-based measures (e.g. debt service coverage ratio) remain. - (ii) Data gaps with regard to CESEE are addressed by using risk-based parameters. The OeNB's “Financial Stability Cube” has been refined to include more granular risk parameter data. The first data submission was received for reference date September 30, 2024. Data quality is now being analyzed by the OeNB’s statistics department with the aim of improving it for the upcoming 2024YE submission. - Recommendation: Enhance stress testing framework to consider second round effects, dynamic balance sheets, and contagion/spillover effects. - Time Frame: MT - Status: A dynamic balance sheet perspective was implemented in the OeNB’s stress test framework ARNIE. It allows projecting Austrian aggregate and bank-specific credit growth, subject to bank-specific growth and deleveraging constraints. Current work focuses on improvements of the dividend distribution module and growth constraints based on individual banks’ management buffer. - Recommendation: Ensure resources and organizational structure are adequate to meet stress testing framework objectives. - Time Frame: NT - Status: Implemented. One new temporary position (duration 2 years) was created, and another temporary position (duration 2 years) was redirected to support further development. ### Financial Crisis Management and Safety Nets - Recommendation: Explicitly provide for purchase and assumption transactions in the bankruptcy regime. - Time Frame: NT - Status: No change. - Recommendation: Seek legislation for standing authority to implement stabilization measures, support funding in resolution, and explore mechanisms for prepositioning BMF to support borrowing by DGSs. - Time Frame: I - Status: No change. - Recommendation: Consider cross-border spillovers in national crisis contingency plans. - Time Frame: NT - Status: A crisis cooperation manual between the OeNB and FMA was concluded in Q2 2020 and updated in 2023. Cross-border spillovers are dealt with in the established procedures of the Resolution Colleges. - Recommendation: Enhance insurance crisis preparedness, introducing pre-emptive recovery planning for eligible insurers. - Time Frame: NT - Status: A fully fledged recovery and resolution regime will be implemented by transposing the IRRD. The IRRD was published in January 2025 and will be applicable from January 2027. Negotiations with the Ministry of Finance have already been initiated for the purpose of implementation. ### Annex VI. Data Issues Annex — National Metadata Highlights - National Accounts: Median Rating AAAA AAA (as presented in table format). - Prices: Coverage AAAAA. - Government Finance Statistics: Coverage AAAA. - External Sector Statistics: Coverage AA. - Monetary and Financial Statistics: Consistency AAA. - Inter-sectoral Consistency: Frequency and Timeliness ratings include AAAAA, A, B, C, D as presented. - Austria adheres to the Special Data Dissemination Standard (SDDS) Plus since January 2017 and publishes the data on its National Summary Data Page. The latest SDDS Plus Annual Observance Report is available on the Dissemination Standards Bulletin Board (https://dsbb.imf.org/). *I-Immediate” is within one year; “NT-near-term” is 1–3 years; “MT-medium-term” is 3–5 years. FMA is the Financial Market Authority; the OeNB is the National Bank of Austria; the BMF is the Ministry of finance.* *Based on information provided by the Austrian authorities.* ### Annex VI. Figure 1. Austria: Data Adequacy Assessment for Surveillance ### Annex VI. Figure 1. Austria: Data Adeacy Assessment for Surveillance ### Use of data in Article IV consultations - Use of data and/or estimates in Article IV consultations in lieu of official statistics available to staff: Staff do not use data and/or estimates in lieu of official statistics. - The authorities provide calendar dates of the main statistical releases. - Financial sector surveillance is supported by regular publication of financial stability assessments by the central bank. ### Other data gaps - Development of statistics on the commercial real estate (CRE) sector, including price and rent indices, and relevant indicators for surveillance of risks to the financial sector from CRE (including debt-service coverage ratio) would be useful. - Some data gaps with respect to CRE are being closed via AnaCredit data and a CRE price index (forthcoming). - The European Commission plans to issue a regulation that requires all EU statistic authorities to publish CRE related price and rent indices; progress is slow and the final regulation is expected to be issued only 2026 or later. - The authorities currently work closely with external partners (e.g., Statistik Austria) to establish bridge solutions for price and rent indices until the final EU regulation enters into force. ### Changes since the last Article IV consultation - No data weaknesses were identified in the 2024 Article IV Staff Report. ### Corrective actions and capacity development priorities - The European Commission plans to issue a regulation that requires all EU statistic authorities to publish CRE related price and rent indices. - Authorities are continuing efforts to close remaining data gaps, including CRE-related series. - Work with external partners (e.g., Statistik Austria) to establish bridge solutions for CRE price and rent indices until the EU regulation enters into force. ### Data adequacy assessment and rationale - Assessment statement: Data provided to the Fund are adequate for surveillance. - Supporting observations: - Austria's economic and financial sector data are comprehensive, generally of high quality, and provided in a timely manner. - The data provided to the Fund have some shortcomings that somewhat hamper surveillance. - The data provided to the Fund have serious shortcomings that significantly hamper surveillance. - Data could be further strengthened by producing and publishing more data series on CRE developments. *Source: Annex VI. Figure 1. Austria: Data Adequacy Assessment for Surveillance (from the provided IMF content).* --- _Source: https://www.imf.org/-/media/files/publications/cr/2025/english/1autea2025001-print-pdf.pdf_