Austrian economy to remain weak in 2015, improvement in 2016: economic institutes

While Austrian economic growth is to remain weak in 2015 with low growth expected, a growth acceleration should be seen in 2016, two leading Austrian economic institutes stated Monday.

In a latest economic prognosis the Austrian Institute of Economic Research (WIFO) and the Institute for Advanced Studies (IHS) left their forecasts for 2015 unchanged at 0.5 percent and 0. 8 percent respectively.

For 2016 WIFO has now raised its previous forecast from 1.1 percent to 1.3 percent, while IHS has kept its previous forecast of 1.6 percent.

Both institutes said the fact that there is at present no significant evidence of economic recovery will lead to subdued growth for the first half of the year. By 2016 however the situation could become more favorable due to a weaker euro along with lower oil and commodity prices.

The new tax reform plans announced by the Austrian government late last week have not yet been factored into the forecasts.

Both institutes also expect unemployment to continue to rise due to an expansion of the labor force. WIFO believes the unemployment rate will increase from 8.4 percent last year to 9.1 percent this year, and 9.4 percent in 2016, while IHS forecasts 8. 9 percent unemployment for both the current year and 2016.