Austria: Outlook for Austria’s economy is brightening

Erste Bank Research Team Erste Bank

The Iran conflict is weighing on sentiment in the services sector and consumer confidence. However, hard data such as production and exports remain robust. We expect moderate growth of 0.7% in 2026 and 1.1% in 2027. Inflation remains elevated due to high energy prices and is likely to stand at 3.2% in 2026 before falling to 2.6% in 2027.

With the 2027/2028 dual budget, the federal government is continuing its consolidation course. The aim is to meet the 3% Maastricht criterion by the end of 2028. The additional net consolidation amounts to EUR 1.5 billion in 2027 and EUR 2.5 billion in 2028. The largest contributions will come from companies, banks and federal government holdings. An analysis and our forecast for the deficit can be found in the latest Macro Outlook.

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Erste Bank Research Team

Erste Bank

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