Austrian economy to grow less than 1 pct in 2014: institutes

Two leading Austrian research institutes have stated in their latest economic forecasts Thursday they expect Austrian GDP growth for the year to only amount to 0.8 percent on the back of a deterioration in the economy.

The Austrian Institute of Economic Research (WIFO) and the Institute for Advanced Studies (IHS) stated international demand and as a result foreign trade is weak and is affecting the mood of investors. This in turn has had a negative impact on employment.

The latest prognosis from both institutes represents a significant downward revision since their last prognosis three months ago, where WIFO expected economic growth of 1.7 percent and the IHS 1.9 percent.

Both institutes however expect an improvement in 2015, WIFO expecting GDP growth of 1.2 percent and IHS 1.6 percent, albeit with only modest upward momentum.

The current crisis between Russia and Ukraine still represents significant risk to Austrian domestic economic growth however, particularly if the situation worsens.

On the other hand, the new European Commission to be appointed later in the year could provide a boost to economic growth if they manage to set clear economic stimulus measures.