IMF Staff Country Reports

Austria started to slowly recover in 2025 after two years of recession, but the energy shock due to the Middle East conflict is weighing on the outlook. A large and complex banking sector with significant exposure to Central Eastern and Southeastern European countries (CESEE) dominates the financial sector. Despite domestic and external headwinds and a rise in NPLs in recent years in commercial real estate (CRE), the banking sector continues to be well capitalized, highly profitable and liquid, with strong
contributions from the CESEE subsidiaries. Key risks arise from subdued economic activity, exposure to CRE lending, and shocks in the CESEE region.