Difference between revisions of "Economy of Austria"

*Economy - overview: [[Austria]], with its well-developed market economy, skilled labor force, and high standard of living, is closely tied to other EU economies, especially Germany's. Its economy features a large service sector, a sound industrial sector, and a small, but highly developed agricultural sector. Following several years of solid foreign demand for [[Austria]]n exports and record employment growth, the international financial crisis of 2008 and subsequent global economic downturn led to a sharp but brief recession. [[Austria]]n GDP contracted 3.8% in 2009 but saw positive growth of about 2% in 2010 and 2.7% in 2011. Growth fell to 0.6% in 2012. Unemployment did not rise as steeply in [[Austria]] as elsewhere in Europe, partly because the government subsidized reduced working hour schemes to allow companies to retain employees. The 2012 unemployment rate of 4.3% was the lowest within the EU. Stabilization measures, stimulus spending, and an income tax reform pushed the budget deficit to 4.5% in 2010 and 2.6% in 2011, from only about 0.9% in 2008. The international financial crisis of 2008 caused difficulties for [[Austria]]'s largest banks whose extensive operations in central, eastern, and southeastern Europe faced large losses. The government provided bank support - including in some instances, nationalization - to support aggregate demand and stabilize the banking system. [[Austria]]'s fiscal position compares favorably with other euro-zone [[countries]], but it faces external risks, such as [[Austria]]n banks' continued exposure to Central and Eastern Europe as well as political and economic uncertainties caused by the European sovereign debt crisis. In 2011 the government attempted to pass a constitutional amendment limiting public debt to 60% of GDP by 2020, but it was unable to obtain sufficient support in parliament and instead passed the measure as a simple law. In March 2012, the [[Austria]]n parliament approved an austerity package consisting of a mix of expenditure cuts and new revenues that will bring public finances into balance by 2016. In 2012, the budget deficit rose to 3.1% of GDP.