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Austrian spending on migrant crisis boosting economy: central bank

Xinhua, November 13, 2015 Adjust font size:

Expenditure related to the present migrant crisis along with upcoming tax reforms are both going to support the Austrian economy heading into 2016, the National Bank of Austria (OeNB) said Thursday.

The OeNB said in a press release that the spending on services related to the migrant care is acting as a short-term economic stimulant, bringing with it 0.1 percent GDP growth for both the fourth quarter of 2015 and the first quarter of 2016.

The tax reforms, to come into effect on Jan. 1, will also give the domestic economy a 0.1 percent boost in the first quarter next year, the central bank claimed as part of its November economic indicators report.

Following both second and third-quarter GDP growth of 0.3 percent the OeNB said the growth would be consolidated going forward, expecting overall fourth-quarter growth of 0.4 percent increasing to 0.5 percent growth in the first quarter of the new year.

It said the tax reforms will lead to an increase in disposable income for private households and as a result revive private consumption that has seen a lengthy stagnation.

Other good signs are that third-quarter exports were 1.4 percent above the long-term average of 1 percent, and that it anticipates gross fixed capital formation to once again contribute to economic growth in the new year.

Residential investments were, however, in the negative in the third quarter, though the OeNB said present trends indicate this will lessen going forward, while industry production has not managed to gain momentum.

Overall, however, the OeNB said it sees "moderately positive economic momentum that will persist into the new year." Enditem