Austria: 2025 Article IV Consultation-Press Release; and Staff Report
IMF Staff Country Reports, July 3, 2025
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- Published: July 3, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229015639.002
Major findings: recent performance and shocks
- The Austrian economy faces a challenging environment following two successive years of recession.
- Adverse shocks from high energy prices and the rapid rise in interest rates to curtail subsequent inflation have dragged down domestic and external demand.
- Heightened uncertainty and weak sentiment have further depressed activity.
- The downturn in activity has been especially significant in manufacturing, construction, and some services.
- Despite weak demand, core inflation has been persistent due in part to rapid wage growth.
- Strong policy responses helped to cushion the impact of recent shocks, but the fiscal deficit and public debt have risen significantly from pre-pandemic levels.
- Austria retains strong institutions that equip it to deal with these challenges.
Inflation, wages, and labor markets
- Core inflation has been persistent.
- Rapid wage growth has contributed to persistent core inflation.
- Labor and labor market dynamics are highlighted as a subject of the report.
Fiscal position and public finances
- Strong policy responses cushioned recent shocks but led to a significant rise in the fiscal deficit and public debt relative to pre-pandemic levels.
Sectoral impact
- Manufacturing: significant downturn in activity.
- Construction: significant downturn in activity.
- Some services: significant downturn in activity.
Medium-term challenges and structural issues
- Weak productivity is identified as a medium-term headwind for growth.
- Demographic aging is identified as a medium-term fiscal and growth headwind.
- The report notes that these structural challenges will weigh on growth and fiscal sustainability over the medium term.
Institutions and policy context
- Austria retains strong institutions that equip it to deal with the identified challenges.
- Subjects covered in the report include: Exchange rate arrangements, Financial institutions, Foreign exchange, Inflation, Labor, Labor markets, Loans, Prices.
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