Austrian central bank sees 2024 recession, reversing growth forecast

The Austrian economy is expected to enter a second year of recession in 2024, the Austrian National Bank said on Friday, scrapping a previous forecast for growth, with a 0.7 per cent decline in economic output now expected this year.

In June, the bank had forecast 0.3 per cent growth for 2024.

Under its latest September forecast, the bank sees the Austrian economy returning to 1.0 per cent growth in 2025, a downward revision from the 1.8 per cent growth forecast in June.

The central bank attributed sharply negative growth in the second quarter to industrial recession due to a weak global economy, and subdued consumer spending.

It signalled an end to the "inflation shock" in Austria, saying that inflation when harmonised to compare with other euro zone members was now expected to ease to 2.9 per cent this year, before settling at slightly above 2.0 per cent in 2025 and 2026.

The latest forecast comes weeks before Austria votes in parliamentary elections on September 29, where the far-right Freedom Party (FPO) is polling strongly.