Vienna (Reuters) – According to economists, the Austrian economy will shrink even more than previously thought due to the coronavirus pandemic.
The economic research institute (Wifo) expects gross domestic product (GDP) to decline by 5.2 percent in 2020, as is evident from the forecast published on Thursday. At the end of March, the minus was forecast at 2.5 percent. The Wifo sees the unemployment rate rise to 8.7 percent in 2020.
Assuming that the spread of the epidemic remains under control, the institute expects economic activity to increase from the third quarter. Wifo sees growth of 3.5 percent in 2021. The growth curve will flatten out again in years after.
“As a result of the Covid-19 pandemic, the prospects for economic development in Austria this year are the worst since the end of the Second World War,” said the Wifo. The slump is significantly higher than as a result of the global financial and economic crisis in 2009. At that time, the economy shrank by 3.8 percent.
As a ray of hope, the institute described that Austria reacted comparatively quickly and that the population strictly followed the restrictions. Austria, along with Denmark, had already begun to relax restrictions after Easter. “As a result, economic activity should pick up somewhat in the course of the second quarter.”