Oesterreichische Nationalbank raises 2027 growth forecast

The Oesterreichische Nationalbank (OeNB) has updated its economic forecasts for Austria, raising growth expectations for 2027 while slightly lowering the outlook for 2026 due to a weaker first half of the year.

For 2026, GDP growth is projected at 0.5%, a 0.1 percentage point decrease from previous estimates. However, the bank raised the 2027 growth forecast to 1.3% from 1.1%. Growth for 2028 is expected to remain steady at 1.2%. The bank noted that positive signals, such as stronger-than-expected global trade and improved order books and sentiment in the domestic manufacturing sector, are expected to manifest more clearly in 2027.

Inflation is projected to decline from 3.0% this year to 2.3% in 2027 and 2.2% in 2028. The OeNB also anticipates a slight improvement in the labor market, with the unemployment rate expected to drop from 7.5% in 2026 to 7.1% by 2028. Despite these improvements, the bank warned of high geopolitical risks and potential impacts from drought conditions.