WIFO: Austria's economy stagnated in the second quarter of 2026

Burdens from the oil price shock and crude oil prices

The momentum in new orders has also recently declined according to WIFO's assessment. Falling order intake indicates that both the export economy and parts of the capital goods industry are likely to grow only to a limited extent in the coming quarters.

The WIFO flash estimate is based on preliminary economic data and will be supplemented by a detailed quarterly accounting in the following weeks. The institute typically publishes the flash estimate at the beginning of a new quarter to provide initial indications of economic developments.

The stagnation in the second quarter is part of a phase of weakened economic activity in which industry is struggling with weaker foreign demand and higher energy and intermediate input costs. The services sector has so far only been able to partially offset this trend.

Outlook for the second half of 2026

Looking ahead to the second half of 2026, WIFO is cautious. Should crude oil prices remain at elevated levels and international demand continue to decline, only modest growth is to be expected for the overall economy.

The preliminary WIFO figures are used as an important indicator in economic policy debate. The APA news agency had already reported on the flash estimate over the weekend. A detailed analysis will be part of the next regular WIFO economic reports.

Overall, the flash estimate makes clear that the Austrian economy is in a phase of stagnation in which individual branches such as financial and insurance services are growing, while other areas such as public administration are recording losses.

The WIFO analysts emphasize that the cyclical weakness does not show signs of an acute recession, but nonetheless needs growth impulses. If the framework conditions – such as energy prices and export demand – do not improve, the stagnation could continue in subsequent quarters.