Austria's economic outlook for the upcoming years reflects a challenging start in 2023, with anticipated shrinkage influenced by several factors such as soaring inflation rates, a notable increase in interest rates, and the impact of a fragile global economy. However, projections from the Austrian Institute of Economic Research or WIFO institute suggest a subsequent recovery for the country's economy in 2024 and 2025.

According to the WIFO institute's estimates, Austria's gross domestic product (GDP) is set to contract by 0.8 per cent in 2023. The institute foresees a positive turn in the following years, with an expected growth of 0.9 per cent in 2024, followed by a more substantial rebound of 2.0 per cent in 2025.

In terms of inflation, WIFO anticipates a considerable rate of 7.9 per cent for 2023. Looking ahead, the projected figures indicate a gradual decline in inflationary pressures. For 2024, the institute forecasts a decrease to 4.0 per cent, followed by a further drop to 3.1 per cent in 2025. These forecasts suggest a gradual easing of the inflationary burden on the Austrian economy over the next few years.

(With Reuters inputs)