Austria’s Enduring Recession Puts Coalition Deficit Goal at Risk

Austria's budget gap is even bigger than expected. Why debt is so high and what this means for the EU deficit procedure

In no European country has the economy shrunk more recently than in Austria. The country loses its wealth and it threatens a lost decade, warn economists.

Why is Austria facing its longest recession in decades?

Austria is now in its third year of recession, with GDP expected to shrink again in 2025. Economists say the crisis runs deeper than inflation.

Austria’s Enduring Recession Puts Coalition Deficit Goal at Risk

Austria’s economy is set to contract for a third consecutive year in a blow to plans to narrow the budget deficit that are a cornerstone of the country’s new coalition government.

Austria's economy will shrink this year for the third consecutive year, predicting Wifo and IHS. This has serious consequences – for the state budget, the labour market and prosperity in the country. In 2026, the recovery is finally to come. However, this forecast is also uncertain.

Austria caught in longest recession since Second World War

Austria’s economy is deteriorating fast as it enters its third year of recession – the longest period of economic contraction since the end of the Second World…