With a population of just over 8m, Austria is sparsely populated and benefits from a high standard of living. Austria is one of the 10 richest countries in the world in terms of GDP per capita at $44,872, and unlike most of the Eurozone, narrowly escaped recession in 2012/13.
The global credit crisis has exacerbated the split in Europe between the crisis-ridden north and the more affluent south. Fortunately, Austria has found
itself firmly in the Northern ‘camp’ and has benefited greatly from its strong social and economic ties to the euro powerhouse – Germany. Austrian economic growth (figure 1) is expected to return to trend at just below 2% in 2014/15 after a 0.4% rise in 2013 and 0.9% in 2012.
The second important factor in Austria’s growth success has been its strong ties to the Central and Eastern Europe (CEE) region where overall economic growth has held up relatively strongly compared to the Eurozone as a whole.
Unemployment grew to approximately 4.8% in 2013, up from 4.4% in 2012. Although high by Austrian standards, the unemployment rate is being influenced by several shifting socioeconomic factors such as a move to retirement age equality for men and women.
As in the UK, inflation (figure 2) has fallen by almost a half during 2011-13 as falling oil and gas prices have helped to ease the cost of living strain. This trend is expected to continue over the medium term as lower fuel costs feed through to lower food price inflation.