Wifo and IHS Present Updated Economic Forecast for Austria

After the recession years 2023 and 2024, the domestic economy grew again by 0.8 percent last year. The OeNB anticipates a continued subdued recovery for 2026, with the outlook also being influenced by international factors.

OeNB Sees Plus of 1.1 Percent

The National Bank (OeNB) has recently already updated its economic forecast and expects no recession for Austria's economy in the current year. For the coming year 2027, the OeNB expects growth and a plus of 1.1 percent in the coming year.

Iran War as a Risk Factor

The effects of the Iran war are slowing economic growth. The geopolitical tensions surrounding the Iran conflict and the associated energy price fluctuations are considered central risk factors for the Austrian export economy and industrial production.

The Iran-US negotiations over a lasting end to the war have, however, recently caused oil and fuel prices to fall sharply again. This development could support the projected growth path and further dampen inflation.

In addition to the growth forecast, the general government deficit will also be in focus on Thursday. In view of the recent recession years and budgetary burdens, observers expect an update of the Maastricht-relevant indicators.

Significance for Budget and Wage Negotiations

The economic forecast by Wifo and IHS is traditionally awaited with great anticipation, as it serves as one of the most important data bases for the federal government's budget planning as well as for the social partners' wage negotiations. The institutes provide both a short-term forecast for the current year and an outlook for the following two years.

There is particular anticipation as to whether the institutes will revise their growth expectations for 2026 downward or upward. Should the Iran war weigh on the economy more heavily than previously assumed, an adjustment of the spring forecast would be conceivable. On the other hand, the falling energy prices as a result of the Iran-US negotiations could bring a positive surprise.