"Austria's economy is set to grow again in 2026, but new forecasts suggest many households will see their incomes fall despite the recovery. After months of recession warnings and gloomy outlooks, Austria's economy is finally showing signs of recovery. New forecasts from the country's leading economic institutes, the Austrian Institute of Economic Research (WIFO) and the Institute for Advanced Studies (IHS), suggest growth is picking up again in 2026."
"Growth is back, but it remains modest WIFO expects Austria's gross domestic product to grow by 0.5 percent this year and by 1.2 percent in 2026. IHS is a touch more cautious, forecasting growth of around 1 percent next year. Both institutes expect a similar pace to continue into 2027, though they note that longer-term forecasts remain uncertain. The labour market is expected to remain relatively stable."
"From 2025, Austria's working-age population, defined as those aged between 15 and 64, is set to shrink for the first time. Fewer people entering the labour market reduces pressure on employment figures, even if economic growth remains moderate. Changes such as higher female employment and longer working lives are offsetting some of the decline, but the labour supply is no longer growing as it used to."
WIFO forecasts Austria's GDP to grow 0.5% this year and 1.2% in 2026, while IHS projects about 1% in 2026. Both institutes expect similar growth into 2027 but flag long-term uncertainty. Unemployment should edge down slightly and overall employment will rise as demographic changes reduce the working-age population from 2025. Higher female employment and longer working lives partially offset labour supply decline. Stronger-than-expected corporate investment and new Statistics Austria data indicate a slight investment increase this year. Despite modest recovery, many households are likely to see short-term income declines.
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