Measures of Cyclical Stabilisation Showing Early Effects. Economic Outlook for 2009 and 2010

In the wake of the international economic crisis, Austrian exports have fallen precipitously year-on-year since early 2009. Yet, the fiscal counter-action taken in the industrialised countries is showing early positive effects. Not only in Austria, but in the entire euro area and the USA, business surveys suggest a stabilisation of demand and output as from the middle of this year. Nevertheless, activity in Austria will once more decline in the second quarter as compared with the previous period. The cyclical pattern is thus broadly in line with the one underlying the previous WIFO forecast of last spring. However, since results for the first quarter turned out weaker than expected, WIFO is taking down its projection for GDP for the whole of 2009 to –3.4 percent. The forecast of a stabilisation in 2010 with a growth rate of 0.5 percent is being maintained.Konjunkturprognose Österreich