Austria: Staff Report for the 2010 Article IV Consultation—Informational Annex
Author: International Monetary Fund
Publication Date:
08 Sep 2010
eISBN:
9781455205530
Language:
English
Keywords:
ISCR; CR; CEBS stress tests; staff appraisal; Austria's economic growth; outturn; membership status; consultation discussion; budgetary fund; social security fund; Reserve assets
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Austria’s recession had limited effects on unemployment. Investment declined sharply but consumption helped cushion the recession, supported by tax cuts and various labor market measures together with large increases in real wages. Austria’s fiscal position has weakened significantly in recent years, although to a lesser extent than the euro area average. The authorities’ plan to embark on a decisive fiscal consolidation path is welcomed. They recognized, however, that reducing the share of foreign exchange loans, while providing continued financing to central and southeastern Europe, will be challenging.

Abstract

Austria’s recession had limited effects on unemployment. Investment declined sharply but consumption helped cushion the recession, supported by tax cuts and various labor market measures together with large increases in real wages. Austria’s fiscal position has weakened significantly in recent years, although to a lesser extent than the euro area average. The authorities’ plan to embark on a decisive fiscal consolidation path is welcomed. They recognized, however, that reducing the share of foreign exchange loans, while providing continued financing to central and southeastern Europe, will be challenging.

Annex I. Austria: Fund Relations

(As of 30 June 2010)

Mission: Consultation discussions were held in Vienna during June 18-June 30, 2010. The authorities released the mission’s concluding statement, which is available at: http://www.imf.org/external/np/ms/2010/062910.htm

Staff team: Ms. Waysand (head), Ms. Herzberg, Mr. Steinlein (all EUR), Ms. Rawlings (MCM). Mr. Prader, Alternate Executive Director for Austria, attended the meetings.

Country interlocutors: The Vice-Chancellor and Minister of Finance; the Governor of the Austrian National Bank (OeNB); the Chief Executive Officers of the Financial Market Authority (FMA); and senior officials at the federal and local government level, the OeNB, and the FMA. The mission also met with the parliamentary budget committee, representatives of economic research institutes, the employers’ organization, the federation of trade unions, and commercial banks. There was a press conference at the end of the mission.

Fund relations: Austria is on a 12-month consultation cycle. The last consultation was completed on June 30, 2009. The report is available at: http://www.imf.org/external/pubs/cat/longres.cfm?sk=23301.0

FATF: The Fund published its Report on Observance of Standards and Codes—FATF Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism in November 2009. The report is available at: http://www.imf.org/external/pubs/ft/scr/2009/cr09299.pdf

Based on its action plan and commitments the FATF plenary removed Austria in June 2010 from the specific review list.

I. Membership Status:

(a) Joined: August 27, 1948

b) Status: Article VIII, as from August 1, 1962

II. General Resources Account:

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III. SDR Department:

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IV. Outstanding Purchases and Loans: None

V. Latest Financial Arrangements: None

VI. Projected Payments to Fund:

(SDR Million; based on existing use of resources and present holdings of SDRs):

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VII. Implementation of HIPC Initiative: Not Applicable

VIII. Exchange System:

As of January 1, 1999, the currency of Austria is the euro. Austria’s exchange system is free of restrictions on the making of payments and transfers for current international transactions with the exception of restrictions notified to the Fund in accordance with decision No.144-(52/51) resulting from UN Security Council Resolutions and EU Council regulations. The most recent notification was made on March 19, 2008. Furthermore, national restrictions apply with respect to certain terror organizations and their activists within the EU, implementing decisions in the Common Foreign and Security Policy (CFSP) framework of the EU.

Annex II. Austria: Statistical Issues

1. Macroeconomic statistics are adequate for surveillance. Austria subscribed to the Fund’s Special Data Dissemination Standard (SDDS) in 1996, and its metadata are available on the Fund’s electronic Dissemination Standards Bulletin Board. Austria is availing itself of the SDDS flexibility option on the timeliness of the industrial production index and the merchandise trade data.

2. The transition to the new European System of Accounts 1995 (ESA 1995) has complicated the analysis of national accounts and fiscal data. The reclassification of public hospitals in 1997 introduced a break in the national account series on public and private consumption. Annual fiscal data for 1995 onward are derived from ESA 1995 data reported to Eurostat, using bridge tables created in a collaborative effort by the Fund and Eurostat. Data on outlays by function have been revised and are available from 1995 onward on a comparable basis according to major functional categories. Quarterly fiscal data reported through Eurostat are disseminated in the IFS.

3. The ECB reporting framework is used for monetary statistics and data are reported to the IMF through a “gateway” arrangement with the ECB. The arrangement provides an efficient transmission of monetary statistics to the IMF and for publication in the IFS and IFS Supplement.

Austria: Table of Common Indicators

(as of 30 July 2010)

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Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

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Cover IMF Staff Country Reports
Austria: 2010 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Austria
Author: International Monetary Fund
Volume/Issue:
Volume 2010: Issue 276
Publisher:
International Monetary Fund
ISBN:
9781455205530
ISSN:
1934-7685
Pages:
49
DOI:
https://doi.org/10.5089/9781455205530.002