Austria’s economic growth curve is set to follow a V-shaped course in the wake of the coronavirus and the containment measures implemented, according to Bank Austria, a member of UniCredit Group.
Austria will enter into a technical recession in H1, followed by a strong recovery in H2 2020 according to a forecast published by Bank Austria. The current growth forecast for Austria for -0.6 percent for 2020 and 2.0 percent for 2021, respectively. The V-shaped recovery is only expected if the coronavirus outbreak is contained relatively quickly and the restrictions are lifted. Estimates suggest that the impact on the Austrian economy is likely to be less severe than it is in many other European countries, partly because Austria’s reliance on the Chinese economy is relatively low with approximately 2.5 percent value creation from China.
The report states, however, that the full effects of the coronavirus will only be apparent in the Austrian economy by April. Due to the lack of certainty surrounding the spread of the coronavirus and the intensity of the government measures that have been introduced, confidence in current forecasts is low and forecasting risk is trending downwards.
UniCredit expects the economic situation to settle over the summer, providing relief for the labour market. According to the report the service sector is likely to see a slower recovery than the industrial sector and There will be a sustained drop in demand for services such as those in the tourism and leisure industries.
