Austria Country Risk Report Q4 2018
The Austrian economy will outperform eurozone averages over the coming years, following a prolonged period of underperformance in previous years.
Growth will be broad based. The labour market is showing signs of improvement which will support household consumption, stronger regional economic activity will boost exports, and fixed investment will rebound on the back of favourable financing conditions and a stronger demand picture.
The Austrian economy will continue to benefit from strong growth trajectories across Central and Eastern Europe (CEE) to which it has strong trade and invest-ment ties.
Austria's next government will likely be a right-wing coalition government between the centre-right People's Party (ÖVP) and the far-right Freedom Party (FPÖ). This will result in Austria acting as an impediment to further eurozone integration and becoming somewhat more ideologically aligned with eurosceptic countries in eastern Europe such as Poland, Hungary and the Czech Republic.
Skilled-labour shortages will continue to persist in the years ahead, which will continue to slow Austrian economic growth.
Wage growth will remain under pressure due to competition from cheaper labour coming in from Central & Eastern Europe.
Austria remains highly dependent on Germany for growth, to which over one-third of its exports go. An economic slowdown in Germany would derail Austria's economic recovery.
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