Austrian central bank sees weak GDP growth for rest of 2014

21 Oct, 2014

VIENNA: Austria's economy will likely have grown just 0.1 percent in the third quarter and grow 0.2 percent in the fourth as exports slacken and political tensions cap business and consumer sentiment, a leading indicator suggested on Tuesday.

The latest readings from the central bank's quarterly business cycle indicator added to evidence that the euro zone is stuck in a quagmire of weak growth and inflation, with even Germany, its biggest member, close to a recession.

The latest Austrian figures were more pessimistic that the 0.4 percent growth for July-October the indicator suggested in July.

If true, the latest readings would signal 2014 gross domestic product (GDP) growth of 0.8 percent, below the 0.9 percent the central bank had forecast in August when it cut its outlook from 1.6 percent.

The export-dependent economy grew a real 0.1 percent in the first quarter and 0.2 percent in the second.

The Austrian National Bank said the outlook for exports remained subdued. Its export indicator, which is based on trucking data, suggested third-quarter exports of goods would ease 0.1 percent from the year-ago period and fall 1.8 percent versus the second quarter adjusted for seasonal factors, extending a drop since May.

With many companies postponing investments, only the housing construction sector was showing growth. The indicator saw no momentum coming from private consumption despite stable employment and firming purchasing power as inflation declines.

Copyright Reuters, 2014

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