The sharp downturn in the global economy over the past one and a half years is having a significant effect on growth in the domestic economy. Preliminary estimates from the Austrian economic research institute Wirtschaftsforschungsinstitut (WIFO) predict a decline in gross domestic product (GDP) over 2009 as a whole, due to the massive reduction in exports and investments. The Austrian GDP is expected to move up again slightly by 1% in 2010. This forecast is based on the assumption that the economy has been slowly starting to recover beginning in 2009.
The packages of measures introduced by the Austrian federal government provide an economic stimulus of around EUR 6 billion and had already led to a stabilisation of the Austrian economy by the end of 2009. In addition, the international recovery is reviving the Austrian export industry and this, together with rising consumer demand, will have a positive effect on growth in the Austrian economy. However, the labour market slowdown will nonetheless continue to be felt in 2010, even though the government economic and labour market stimulus packages continue to have an effect.
The significant low recorded for economic growth in Eastern Europe in 2009 is being followed by a return of positive expectations for 2010. The success of the economic stabilisation measures implemented in Western Europe will have a noticeable effect on the highly export-driven economies of the CEE region. The CEE region is therefore expected to once again record increases in GDP.
While the expected recovery in Western Europe is expected to be slow in 2010, with GDP growth of just above 0%, the countries of Poland, Romania, Czech Republic, Slovenia and Slovakia in particular are expecting good growth numbers in the range of 0.5% to 1.8%.
Therefore, it can be generally assumed that the momentum of the economic convergence process in this region will continue to remain largely intact in the future.