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Austrian economy to see minor growth, unemployment increase: economic institutes

Xinhua, June 19, 2015 Adjust font size:

The Austrian economy is expected to see low growth for 2015 and while an improvement is expected in 2016, so is a rise in unemployment, two leading Austrian economic research institutes stated Thursday.

As part of their quarterly economic forecasts, the Austrian Institute of Economic Research (WIFO) and the Institute for Advanced Studies (IHS) said they expect 0.5 percent and 0.7 percent GDP growth for 2015 respectively, the IHS making a slight 0.1 percent downward revision to its forecast.

If the forecasts hold true it will mark the second year in a row that the Austrian economy has seen lower growth than any other in the euro area.

Both institutes expect the rate of growth to expand in the second half of 2015, however, with a euro devaluation to boost exports, and tax reforms to impact positively on private demand, though WIFO said some effects of the reforms will only be felt from 2017.

Both institutes also expect unemployment to be higher than previously expected, WIFO forecasting by the Austrian domestic calculation method a 9.3 percent and 9.6 percent rate in 2015 and 2016, and IHS 9.1 percent for both years, following 8.4 percent recorded in 2014.

The IHS stated that GDP growth in 2016 will be too low to stabilise unemployment. Endit