On September 10, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation 1 with Austria.
Austria is a rich, equitable and stable country. The social safety net is ample; thus, poverty and income inequality are low, contributing to strong social cohesion and security.
The economic recovery is strong and broad-based. Following several years of slow growth, Austria’s output picked up markedly in 2017, and through early-2018. Output expanded by 3 percent in 2017, boosted by income tax cuts passed in 2016, higher public spending on refugees and a recovery in private investment in 2017, laying the foundation for a sustained robust expansion. Consumer and business confidence indicators have surpassed levels observed before the GFC and credit growth has recovered. Employment growth has accelerated, and unemployment has begun declining recently. Inflation is running slightly higher than in peers, albeit close to the ECB Euro Area target. Financial sector buffers have strengthened. Debt has declined by 5 percentage points of GDP to 78.5 percent in the year to end-2017. The near-term outlook is for strong growth in 2018, at 3 percent, and a gradual return to a potential growth of about 1¾ percent over the medium-term. Risks to the baseline are mainly external, however, their impact would likely be limited.
Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm.