Economic growth slows in the fourth quarter of 2025

GDP reading: Austria's GDP grew 0.2% on a seasonally adjusted quarter-on-quarter basis in Q4, following a 0.4% expansion in the prior quarter and matching the Q1–Q3 growth average. On a year-on-year basis, economic output expanded 0.7% in Q4, following 1.0% growth in the previous quarter. Meanwhile, in 2025 as a whole, GDP grew 0.6%, recovering timidly from 2024’s 0.8% fall and marking the first expansion in three years.

Drivers: Relative to the previous quarter's data, readings in Q4 worsened for government consumption (+0.4% in seasonally adjusted quarter-on-quarter terms vs +0.7% in Q3) and fixed investment (-0.7% vs -0.1% in Q3). In contrast, readings picked up for private consumption (+0.4% vs -0.3% in Q3), exports of goods and services (+0.6% vs -1.6% in Q3) and imports of goods and services (+0.2% vs -0.5% in Q3).

Panelist insight: EIU analysts said: “We forecast that real GDP growth will accelerate only moderately [in 2026 from 2025]. Faster growth will be supported by an increase in private consumption in the wake of monetary loosening, alongside stronger demand in the German economy amid lower interest rates and inflation, supporting demand for exports. Austria's growth outlook is closely tied to Germany's industrial performance. This is due to the two countries' integrated industrial sectors, whereby a good German industrial performance lifts Austria's manufacturing exports. Germany's fiscal reforms, to sharply expand defence spending and create a €500bn fund for infrastructure, will boost German growth substantially from 2027, which should support Austrian growth.”

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