Economic Outlook

Economy grows marginally in the first quarter

Statistics Austria published its preliminary calculation of the national accounts (VGR) for 1Q2025. According to the figures, the Austrian economy grew slightly by +0.1% compared to the previous quarter, close to the preliminary estimate of 0.2% already published. However, on an annual basis, Austrian gross domestic product (GDP) contracted by -0.5% year-on-year, marking the eighth consecutive quarter of decline. A look at the GDP components reveals a mixed picture. Private consumption grew by +0.9% y/y for the third quarter in a row, and gross investment also grew by +1.2% y/y. Exports declined for the eighth quarter in a row and, at -4.0% y/y, performed worse than in previous quarters. Advance effects on exports in connection with US tariffs, which were observed in Germany, for example, are unlikely to have had any impact on the Austrian economy in 1Q2025. We forecast GDP growth of -0.2% for 2025. In particular, US tariffs in conjunction with Donald Trump's erratic policies are having a negative impact on Austrian exports and subsequently also on investment. We do not expect positive impetus from the planned German infrastructure program until next year. We expect GDP growth of +0.4% in 2026.