OECD Country Reports
In addition to the OECD Economic Outlook, the OECD Country Reports (Economic Surveys) are the key publications on economic and growth policies at OECD level.
For the purpose of preparing the individual country reports, the Economic and Development Review Committee (EDRC) carries out a review every 18-24 months for each OECD Member as well as accession candidates and non-Members which closely cooperate with the OECD. The country reports focus on long-term macro-economic developments, identify the main structural challenges of a country and suggest possible options for policy design. The special feature of the 2024 report was on how to achieve a successful green transformation in Austria.
Previous focuses:
- 2021 Analysis of the structural impact and financial shock of the Covid-19 pandemic
- 2019 capital structure of the Austrian business sector, the shortage of skilled workers and business transfers
- 2017 Digitalisation
- 2015 Gender Balance
- 2013 Well-Being
- 2011 Health
- 2009 Education
Main findings of the country report
- Economic development: Economic activity has slowed since the second half of 2022 due to high inflation and reduced domestic demand. The outlook shows that inflation will decline and, together with the easing of monetary policy and the recovery of global growth, will support Austria's GDP growth. Government spending has risen sharply due to the pandemic, but the state of public finances will also continue to improve. However, spending pressures, mainly caused by population ageing, remains one of the biggest challenges for fiscal policy. A more growth-friendly tax system could help ease the burden on public finances.
- Productivity growth: As in many other comparable countries, productivity growth is weak in Austria. What is striking, is the low dynamics of company entry and exit. For the OECD, promoting competition and reducing regulatory barriers, especially in professional services, are still the key levers for improving market dynamics and thus productivity. Austria is also lagging somewhat behind comparable countries in terms of innovation activity, although Austria offers very generous incentives for innovation activities. A greater use of venture capital or a shift towards more equity financing could increase innovation dynamics and thus productivity. In this context, a high degree of digitization is crucial; Austria has some catching up to do, especially in the provision of broadband connections.
- Education and labour market: Income differences in Austria are relatively small, but disadvantaged groups have unequal opportunities in education and on the labour market. The socioeconomic status of students continues to be a strong indicator of their performance. Gender-specific differences in working hours and pension income are also persistent.
- Achieving a successful green transformation: The goal of eliminating net greenhouse gas emissions by 2040 does not seem to be achievable on the current path. The largest source of greenhouse gases is transport, which in Austria is largely characterized by car use. Emissions from energy use in buildings are also high, compared to other countries. Reducing regulatory hurdles could also make a difference in the energy sector, as the procedures for installing systems to generate renewable energy are complex, which in turn slows down their use.
Key recommendations
- Ensuring fiscal sustainability and making the tax system more growth-friendly means, among other things, maintaining a stable public deficit in the short term, but introducing a more stringent medium-term plan to reduce the deficit and debt levels and ensuring the long-term sustainability of the pension system and the health sector.
- Improving productivity by easing regulation of services, in particular the strict entry requirements for certain professional services. Promoting greater transparency in lobbying to improve public perceptions of corruption.
- Addressing inequalities stemming from socioeconomic differences by further expanding high-quality early childhood education and care services and providing more resources to low-performing schools with greater needs.
- Decarbonising the economy and adapting to climate change by accelerating effective carbon price increases and eliminating fossil fuel subsidies; reforming the commuter allowance; simplifying procedures for installing renewable energy; providing targeted support to reduce emissions from private households; curbing above-average land use.
Additional Information
Contact
National Economic Policy Issues and Analysis: Allgemeine-Wirtschaftspolitik@bmaw.gv.at