Given the challenging global and national economic situation, the performance of the Austrian insurance market should not be interpreted as a sign of a weakness specific to the insurance sector. The Austrian market as a whole recorded a small decline of -0.9% in 2012, primarily because of the fall in the life insurance area (-6.7%).
Austrian gross domestic product recorded real growth of only +0.6%, with particularly poor performance of +0.1% and -0.1% in the 2nd and 4th quarter, respectively. As a small open economy, Austria was hit in a particular way by the sovereign debt crisis and accompanying slowdown in global trade. However, government budget cutbacks and the modernised structure of the economy provided protection against a deep recession.
Although the growth in gross domestic product of the ten newest EU member states (NMS-10) was low, at 1.1%, it was nevertheless considerably higher than the growth for the EU-27, which recorded a fall of 0.3%. Unemployment in the NMS-10 was 9.8% in 2012, 0.7 percentage points lower than the EU-27. Due to muted demand from the EU-15, the current accounts of these countries only recovered slightly by 0.6 percentage points.
At the European level, the EU demonstrated that it was able to act quickly, which was instrumental in bringing temporary calm to the financial markets, and the ECB took a stronger position than it had in the past.