Sentiment improved slightly at the start of the year, but economy continues to weaken
“The UniCredit Bank Austria Business Indicator rose to minus 2.6 points in January, but remains at a very low level for the time being”, says UniCredit Bank Austria Chief Economist Stefan Bruckbauer, adding: “Following the deterioration in the second half of 2024, which culminated in a low for the year in December, economic sentiment in Austria recovered slightly at the start of the year.” Although the problems in the export business continue to be a burden, the improved conditions for domestic demand due to lower inflation and lower interest rates are becoming more noticeable for entrepreneurs and consumers in Austria and have led to a slight improvement in the sentiment barometer. “However, the level of the UniCredit Bank Austria Business Indicator remains low and is at a similar level to the annual average for 2023 and 2024, both years that saw GDP in Austria fall by around one percent”, Bruckbauer continues.
- Although the low in sentiment at the end of the year was overcome, the UniCredit Bank Austria Business Indicator remained in negative territory at minus 2.6 points despite a slight increase in January 2025
- The improvement was mainly driven by the services sector and a somewhat brighter export environment
- A greater willingness to consume and invest due to lower inflation and interest rates should make domestic demand the driving force behind a slight recovery over the course of the year
- We have lowered our GDP forecast for 2025 from 0.9% to 0.3%. This is due to a lower statistical overhang and restrictive fiscal measures
- Despite headwinds at the start of the year, the expiring second-round effects should inflation to fall from 2.9 percent in 2024 to 2.5 percent in 2025 and further to 1.9 percent in 2026
- The unemployment rate will rise to an average of 7.3% in 2025. No improvement is expected for 2026
- Further interest rate cuts by the ECB to below the neutral level
UniCredit Bank Austria Business Indicator (PDF)
UniCredit Bank Austria Business Indicator – Computation method (PDF)
as of February, 2025
About UniCredit Bank Austria Business Indicator
The UniCredit Bank Austria Business Indicator provides an overview of the current economic situation in Austria.
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