Key Facts (2021):
Population: 8.92 million
GDP (per capita): $475.2 billion ($53,273)a
GDP growth: 4.8% (2022 projection: 3.8%)
Inflation (CPI): 2.8% (2022 projection: 7.5%)
Unemployment: 6.2% (2022 projection: 4.5%)
Sources: WIFO Konjunkturprognose 2/2022, IHS-Sommerprognose 2022, and Statistik Austria
Exchange rate: 2021 avg. Euro 1:US$ 1.18
The Austrian GDP grew a respectable 4.8% in 2021, after a 6.7% economic contraction in 2020. The recovery was somewhat weaker than originally predicted due to damaging Covid-19 waves that caused disruptions throughout the year, supply chain bottlenecks, and rising energy prices. Especially the hospitality and tourism sectors continued to struggle with Covid-19 measures, while manufacturing, business services, and construction performed well. Most economists predict continued growth between 3.8% and 4.3% in 2022, this time with a larger share going to tourism and other in-person services as pent-up demand returns.
According to Austria’s government statistics office, the global post-Covid recovery of 2021 brought a spectacular rebound in foreign trade: imports jumped by 23.4% to $210 billion (after falling 9.4% in 2020), and exports charted an impressive 16.2% upswing to $195 billion (after falling 7.8% in 2020). The U.S. position has weakened slightly. As a source of imports, the United States fell from the sixth to the seventh largest source with an import volume of $6.7 billion in 2021. As an export destination, the U.S. fell one place, from second to third, with an export volume of $13.1 billion in 2021. Austria’s three paramount import sources are now Germany, China, and Italy, and its top export destinations are Germany, Italy, and the United States.
According to the U.S. Bureau for Economic Analysis, most U.S. exports to Austria fall into one of five categories: pharmaceutical products, organic chemicals, medical and optical products, machines, and parts (including data processing equipment), and electric machinery. Services accounted for around 20% of total exports in 2021, led by financial services. Austria’s major goods exports to the United States are vehicles and engines, machines and parts, pharmaceuticals, and beverages.
Foreign direct investment continues to be a driving force in the bilateral economic relationship, contributing significantly to trade flows in both directions. Austria is one of the fastest- growing sources of U.S. foreign direct investment, and the Austrian National Bank ranks the U.S. as Austria’s third-largest investor source country after Germany and Russia. According to the U.S. Bureau of Economic Analysis, the U.S. (outward) investment position in Austria was $4.6 billion in 2021, an increase of 1% over the previous year. The direct investment position of Austria in the United States (inward) was $16.2 billion in 2021, an increase of 5.1% over 2020.
Political & Economic Environment: State Department’s website for background on the country’s political environment.