Abstract
AUSTRIA
AUSTRIA
STAFF REPORT FOR THE 2021 ARTICLE IV CONSULTATION—SUPPLEMENTARY INFORMATION
August 24, 2021
Prepared By
European Department
1. This statement reports on developments that occurred since the staff report was issued to the Executive Board. This supplementary information does not alter the thrust of the staff appraisal.
2. COVID infections have risen in recent weeks, reflecting the increased prevalence of the delta variant. From a low of only 476 new cases in the first week of July, weekly infections have risen to 5,650 by mid-August. This number is still well below the peak of nearly 51,000 new cases weekly in November 2020. COVID deaths have remained very low so far despite climbing cases. Vaccinations continue to rise but the pace has slowed sharply. As of August 23 2021, 71.6 percent of adults (18+) in Austria had at least one vaccine dose, falling below the EU average of 74.9 percent.
3. On July 30, 2021, the Financial Markets Authority suspended the operations of another small bank, AutoBank AG, after the bank’s shareholders failed to produce a viable plan to wind down operations and subsequently filed for the initiation of insolvency proceedings on August 12, 2021. At the time of its closure, the bank held EUR 109 million in deposits, of which EUR 107 million are covered by the deposit guarantee. As of mid-August, some EUR 76 million have already been paid out by the deposit insurance scheme (Einlagensicherung). The failure of this non-systemic bank is unlikely to jeopardize Austria’s financial stability.
4. Recently released economy activity indicators continued to show a mixed rebound in economic activity in 2021: Q2. The flash GDP estimate posted strong growth of 4.3 percent (q/q), but output remained below the pre-crisis level. Industrial production in June rose by 11.3 percent compared to last year, but slipped 1.8 percent compared to May and stands 1.7 percent above the pre-crisis levels. Tourism activity has also rebounded but remains well below its precrisis level. Overnight stays were up 42.5 percent (yoy) in June, but are still 40.8 percent below the precrisis figure.
5. Annual inflation edged up in July to 2.9 percent, from 2.8 percent in June. The price increase was driven by transportation costs (+8.0 percent) and household energy prices (+3.3 percent). Staff remains of the view that these price developments are largely temporary.
6. Gross international reserves in 2021 have increased with the SDR allocation of EUR 4.56 billion. The authorities intend to save the new SDR allocation as international reserves, and the macroframework has been updated accordingly (Table 4).
Update to Table 4. Austria: Balance of Payments, 2018–26
(In percent of GDP, unless otherwise indicated)
Update to Table 4. Austria: Balance of Payments, 2018–26
(In percent of GDP, unless otherwise indicated)
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Projections | ||||||||||||
| BALANCE OF PAYMENTS | ||||||||||||
| Current account | 1.3 | 2.8 | 2.5 | 2.0 | 2.3 | 2.1 | 2.0 | 2.3 | 2.4 | |||
| Balance on goods and services | 3.1 | 3.2 | 3.5 | 2.9 | 3.3 | 3.0 | 3.0 | 3.3 | 3.4 | |||
| Exports of goods and services | 55.6 | 55.5 | 52.6 | 54.7 | 55.4 | 55.2 | 55.0 | 55.1 | 55.4 | |||
| Exports of goods | 39.0 | 38.4 | 37.5 | 39.2 | 38.4 | 38.3 | 38.1 | 38.2 | 38.4 | |||
| Exports of services | 16.6 | 17.2 | 15.1 | 15.5 | 17.1 | 17.0 | 16.8 | 16.9 | 17.0 | |||
| Imports of goods and services | 52.5 | 52.3 | 49.1 | 51.8 | 52.1 | 52.2 | 51.9 | 51.9 | 52.0 | |||
| Imports of goods | 38.5 | 37.6 | 36.2 | 38.7 | 38.0 | 37.7 | 37.5 | 37.5 | 37.7 | |||
| Imports of services | 14.1 | 14.7 | 13.0 | 13.0 | 14.2 | 14.5 | 14.4 | 14.4 | 14.4 | |||
| Primary income, net | -0.9 | 0.5 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | |||
| Secondary income, net | -1.0 | -0.9 | -0.9 | -0.9 | -0.9 | -0.9 | -0.9 | -0.9 | -0.9 | |||
| Capital account | -0.6 | -0.1 | -0.2 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | |||
| Financial account | 1.8 | 4.3 | 1.4 | 1.9 | 2.3 | 2.0 | 2.0 | 2.2 | 2.3 | |||
| Direct investment, net | 0.5 | 1.7 | 2.8 | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 | |||
| Direct investment abroad, net | -6.1 | -0.2 | -3.4 | -0.2 | -0.2 | -0.2 | -0.2 | -0.2 | -0.2 | |||
| Direct investment in Austria net | -6.6 | -1.9 | -6.2 | -1.9 | -1.9 | -1.9 | -1.9 | -1.9 | -1.9 | |||
| Portfolio investment, net | 0.9 | -1.3 | -3.9 | -3.8 | -2.2 | -2.5 | -2.5 | -2.3 | -2.2 | |||
| Financial derivatives, net | -0.2 | 0.4 | 0.3 | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 | |||
| Other investment, net | 0.0 | 3.6 | 1.8 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | |||
| Reserve assets | 0.6 | 0.0 | 0.4 | 1.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Errors and omissions, net | 1.1 | 1.5 | -1.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| BALANCE SHEET | ||||||||||||
| Int’l investment position, net | 5.3 | 12.1 | 10.9 | 13.4 | 14.8 | 16.2 | 17.4 | 19.0 | 20.7 | |||
| Assets | 220 | 228 | 235 | 231 | 223 | 219 | 215 | 213 | 212 | |||
| Liabilities | 215 | 216 | 225 | 218 | 208 | 203 | 197 | 194 | 192 | |||
| Direct investment | 10 | 11 | 10 | 11 | 12 | 13 | 14 | 15 | 17 | |||
| Assets | 72 | 70 | 65 | 62 | 58 | 55 | 52 | 50 | 48 | |||
| Liabilities | 62 | 60 | 56 | 51 | 46 | 42 | 38 | 35 | 32 | |||
| Portfolio investment | -17 | -15 | -19 | -22 | -22 | -24 | -25 | -27 | -28 | |||
| Financial derivatives | 0 | 0 | 0 | 0 | 1 | 1 | 1 | 2 | 2 | |||
| Other investment | 7 | 11 | 14 | 15 | 17 | 19 | 20 | 22 | 24 | |||
| Reserve assets | 5 | 5 | 7 | 9 | 8 | 8 | 7 | 7 | 7 | |||
| MEMORANDUM ITEMS | ||||||||||||
| Export value (goods and services) | 7.5 | 2.9 | -10.1 | 10.0 | 8.0 | 4.0 | 4.5 | 3.9 | 3.8 | |||
| Import value (goods and services) | 7.5 | 2.8 | -10.9 | 11.5 | 7.3 | 4.5 | 4.5 | 3.4 | 3.6 | |||
| Nominal GDP (billions of euro) | 385 | 398 | 377 | 399 | 425 | 444 | 466 | 482 | 498 | |||
Update to Table 4. Austria: Balance of Payments, 2018–26
(In percent of GDP, unless otherwise indicated)
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Projections | ||||||||||||
| BALANCE OF PAYMENTS | ||||||||||||
| Current account | 1.3 | 2.8 | 2.5 | 2.0 | 2.3 | 2.1 | 2.0 | 2.3 | 2.4 | |||
| Balance on goods and services | 3.1 | 3.2 | 3.5 | 2.9 | 3.3 | 3.0 | 3.0 | 3.3 | 3.4 | |||
| Exports of goods and services | 55.6 | 55.5 | 52.6 | 54.7 | 55.4 | 55.2 | 55.0 | 55.1 | 55.4 | |||
| Exports of goods | 39.0 | 38.4 | 37.5 | 39.2 | 38.4 | 38.3 | 38.1 | 38.2 | 38.4 | |||
| Exports of services | 16.6 | 17.2 | 15.1 | 15.5 | 17.1 | 17.0 | 16.8 | 16.9 | 17.0 | |||
| Imports of goods and services | 52.5 | 52.3 | 49.1 | 51.8 | 52.1 | 52.2 | 51.9 | 51.9 | 52.0 | |||
| Imports of goods | 38.5 | 37.6 | 36.2 | 38.7 | 38.0 | 37.7 | 37.5 | 37.5 | 37.7 | |||
| Imports of services | 14.1 | 14.7 | 13.0 | 13.0 | 14.2 | 14.5 | 14.4 | 14.4 | 14.4 | |||
| Primary income, net | -0.9 | 0.5 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | |||
| Secondary income, net | -1.0 | -0.9 | -0.9 | -0.9 | -0.9 | -0.9 | -0.9 | -0.9 | -0.9 | |||
| Capital account | -0.6 | -0.1 | -0.2 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | |||
| Financial account | 1.8 | 4.3 | 1.4 | 1.9 | 2.3 | 2.0 | 2.0 | 2.2 | 2.3 | |||
| Direct investment, net | 0.5 | 1.7 | 2.8 | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 | |||
| Direct investment abroad, net | -6.1 | -0.2 | -3.4 | -0.2 | -0.2 | -0.2 | -0.2 | -0.2 | -0.2 | |||
| Direct investment in Austria net | -6.6 | -1.9 | -6.2 | -1.9 | -1.9 | -1.9 | -1.9 | -1.9 | -1.9 | |||
| Portfolio investment, net | 0.9 | -1.3 | -3.9 | -3.8 | -2.2 | -2.5 | -2.5 | -2.3 | -2.2 | |||
| Financial derivatives, net | -0.2 | 0.4 | 0.3 | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 | |||
| Other investment, net | 0.0 | 3.6 | 1.8 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 | |||
| Reserve assets | 0.6 | 0.0 | 0.4 | 1.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Errors and omissions, net | 1.1 | 1.5 | -1.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| BALANCE SHEET | ||||||||||||
| Int’l investment position, net | 5.3 | 12.1 | 10.9 | 13.4 | 14.8 | 16.2 | 17.4 | 19.0 | 20.7 | |||
| Assets | 220 | 228 | 235 | 231 | 223 | 219 | 215 | 213 | 212 | |||
| Liabilities | 215 | 216 | 225 | 218 | 208 | 203 | 197 | 194 | 192 | |||
| Direct investment | 10 | 11 | 10 | 11 | 12 | 13 | 14 | 15 | 17 | |||
| Assets | 72 | 70 | 65 | 62 | 58 | 55 | 52 | 50 | 48 | |||
| Liabilities | 62 | 60 | 56 | 51 | 46 | 42 | 38 | 35 | 32 | |||
| Portfolio investment | -17 | -15 | -19 | -22 | -22 | -24 | -25 | -27 | -28 | |||
| Financial derivatives | 0 | 0 | 0 | 0 | 1 | 1 | 1 | 2 | 2 | |||
| Other investment | 7 | 11 | 14 | 15 | 17 | 19 | 20 | 22 | 24 | |||
| Reserve assets | 5 | 5 | 7 | 9 | 8 | 8 | 7 | 7 | 7 | |||
| MEMORANDUM ITEMS | ||||||||||||
| Export value (goods and services) | 7.5 | 2.9 | -10.1 | 10.0 | 8.0 | 4.0 | 4.5 | 3.9 | 3.8 | |||
| Import value (goods and services) | 7.5 | 2.8 | -10.9 | 11.5 | 7.3 | 4.5 | 4.5 | 3.4 | 3.6 | |||
| Nominal GDP (billions of euro) | 385 | 398 | 377 | 399 | 425 | 444 | 466 | 482 | 498 | |||