IHS projects only one percent economic growth per year for Austria by 2030

For the current year, the economists expect that the Austrian economy should have stagnated in the second quarter of 2026. Bank Austria chief economist Stefan Bruckbauer explained: "Dennoch dürfte das BIP in Österreich im ersten Halbjahr um 0,8 Prozent im Jahresvergleich zugelegt haben." After a stubborn recession in the two previous years, Austria's economy returned to a growth path in 2025, albeit only a "subdued" one, as the Institute for Advanced Studies (IHS) puts it.

Economic activity 2026: Stagnation in the second quarter

For exports, the IHS assumes that domestic shipments will grow in line with international markets going forward. "Das sollte auf einen zweiprozentigen Zuwachs der Ausfuhren pro Jahr hinauslaufen, denn so stark sollen Österreichs Exportmärkte im Mittel bis 2030 wachsen," the forecast states. "Nach deutlichen Marktanteilsverlusten in den Vorjahren dürften die Exporte wieder im Einklang mit den Exportmärkten zulegen." Global goods trade has proven resilient despite erratic US trade policy.

Exports should once again grow with the global market

Economic activity is dampened, according to the IHS, by private consumption. Starting from 0.5 percent this year, consumption will increase by around 0.75 percent in each of the following years, the forecast states. The consumer climate is currently being dampened by budget consolidation and declining real incomes.

Private consumption remains subdued

Sentiment indicators also paint an unfavorable picture. According to Bank Austria, economic sentiment darkened again somewhat in June. Bruckbauer said: "Auch in der Industrie habe das Sentiment einen Dämpfer erhalten, während es am Bau etwas weniger Pessimismus gebe." The mood has deteriorated most sharply since the beginning of the year in the services sector. With the start of the Iran war, inflation rates rose sharply and confidence indices slumped.

On prices, the IHS expects a slow normalization. At an average of three percent, inflation – which the IHS puts at three percent this year – should still be one percentage point above the European Central Bank's (ECB) target. Accordingly, it will take until 2028 for inflation here to fall back to the targeted mark of two percent.

Labor market and skilled labor shortage

There are, however, cautious bright spots on the labor market. Since this year, employment development in Austria has been trending slightly upward again, and the rise in unemployment has slowed significantly, the IHS writes. Starting from 7.5 percent this year, the unemployment rate will fall to 6.4 percent by the end of the decade, albeit held back by skilled labor shortages. According to a survey by credit protection agency KSV 1870, nine out of ten companies find it difficult to find suitable personnel.

Outlook: Subdued growth until 2030

Overall, the IHS forecast thus paints a picture of an economy that, while having left the recession behind, will only slowly gather momentum for years to come. While industry suffers from the subdued global economy and uncertain US trade policy, private consumption remains burdened by budget consolidation and real wage losses. Only toward the end of the decade is the situation expected to gradually stabilize – provided inflation approaches the ECB target and the persistent skilled labor shortages can at least be alleviated.

The IHS medium-term forecast was published on Thursday, July 16, 2026, and forms the data basis for the expectations summarized here.