Austria’s WIFO revises up 2022 forecast but warns economy losing steam

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Cranes are pictured at a construction site in Vienna

BERLIN (Reuters) – Austria’s economic recovery is losing steam, the WIFO institute said on Thursday, even as its outlook for 2022 improved.

Austrian gross domestic product is expected to grow by 4.3% in 2022 and 1.6% in 2023 in real terms, the think tank said, after predicting increases of 3.9% and 2.0%, respectively, in March.

“This sounds like a booming economy, but the growth will be felt by the public in only a diminished way,” WIFO Director Gabriel Felbermayr said.

The IHS institute also slightly raised its GDP forecast for this year, saying it expects Austria’s economy to grow by 3.8%, up from the 3.6% it had predicted in March.

The institute also sees 2023 GDP growth of only 1.4%.

Inflation and the effects of the war in Ukraine are slowing down the country’s recovery, said the institutes, which predict the inflation rate to come in at more than 7% this year.

(Writing by Rachel More and Miranda Murray, Editing by Paul Carrel)