Almost at the bottom of the EU:

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The EU is forecasting a 0.6 percent drop in gross domestic product for Austria.

(Bild: studio v-zwoelf - stock.adobe.com)

It is now official: Austria is the problem child in Europe when it comes to the economy. While the EU economy is growing this year, our own is shrinking. Next year, too, we will be well behind in comparison.

Austria's economy is falling further and further behind: while gross domestic product (GDP) in the EU as a whole is growing by 0.9 percent this year, it is shrinking by 0.6 percent in Austria. This puts us almost at the bottom of the league. Only in Estonia is economic output falling even more sharply than in Austria, at minus one percent (see chart with selected countries). The economic research institutes Wifo and IHS also assume that the domestic economy will shrink this year.

(Bild: Krone KREATIV/stock.adobe.com)

According to the EU economic forecast, Malta is the absolute frontrunner with growth of five percent in 2024. In Croatia, GDP will grow by 3.6 percent, in Spain and Poland by three percent. In the Czech Republic it is plus one percent, in Italy plus 0.7 percent and in Hungary plus 0.6 percent.

The decline is six times higher than in Germany
However, economists are concerned about Europe's largest economy, Germany. Economic output there is likely to fall by 0.1 percent this year. In Austria, however, the decline is likely to be six times as high.

According to the forecast, we will also lag behind other countries in the coming year: while the economy in the EU as a whole is expected to grow by 1.5 percent, the experts estimate that Austria will only grow by one percent, putting us almost at the bottom of the league once again.

Inflation is falling
On the other hand, there is some relief on the price front. Inflation will fall to 2.9 percent this year, which is only slightly above the European average of 2.4 percent. In 2025, domestic inflation is expected to be just 2.1 percent - exactly the same as in the EU. In 2026, inflation in Austria is expected to be just 1.7 percent, which would mean that the European Central Bank's target of below two percent would be achieved.

Of course, the forecasts for the next two years are still fraught with uncertainty. This is because it is unclear how Donald Trump's second presidential term in the USA, which begins on January 20, will affect the global economy. New tariffs, for example, could hit global trade hard.