Economy of Austria

The economy of the Republic of Austria may be characterised as a social market economy similar in structure with that of Germany.

In 2004 Austria was the fourth richest country within the European Union, having a GDP (PPP) per capita of approximately € 27'666, with Luxembourg, Ireland, and Netherlands leading the list. [en icon [http://epp.eurostat.ec.europa.eu/pls/portal/docs/PAGE/PGP_PRD_CAT_PREREL/PGE_CAT_PREREL_YEAR_2007/PGE_CAT_PREREL_YEAR_2007_MONTH_02/1-19022007-EN-AP.PDF Regional GDP per inhabitant in the EU27] , provided by Eurostat]

Vienna was ranked the fifth richest NUTS-2 region within Europe (see Economy of Europe) with GDP reaching € 38'632 per capita, just behind Inner London, Luxembourg, Brussels-Capital Region and Hamburg. [en icon [http://epp.eurostat.ec.europa.eu/pls/portal/docs/PAGE/PGP_PRD_CAT_PREREL/PGE_CAT_PREREL_YEAR_2007/PGE_CAT_PREREL_YEAR_2007_MONTH_02/1-19022007-EN-AP.PDF Regional GDP per inhabitant in the EU27] , provided by Eurostat]

Growth has been steady in recent years 2002-2006 pendling between 1 and 3.3 %. [en icon [http://www.oenb.at/isaweb/report.do?&lang=EN&report=7.7 Real GDP Growth – Expenditure Side] , provided by the Austrian National Bank] Because of its position in central Europe it has gained significance as a gateway to the new EU memberstates.

History

Ever since the end of the World War II, Austria has achieved sustained economic growth. In the souring 1950s, the rebuilding efforts for Austria lead to an average annual growth rate of more than 5% in real terms and averaged about four point five percent through most of the 1960s. Following moderate real GDP growth of 1.7%, 2% and 1.2%, respectively, in 1995, 1996, and 1997, the economy rebounded and with real GDP expansion of 2.9 percent in 1998 and 2.2% in 1999.

Austria became a member of the EU on January 1, 1995. Membership brought economic benefits and challenges and has drawn an influx of foreign investors attracted by Austria's access to the single European market. Austria also has made progress in generally increasing its international competitiveness. As a member of the economic and monetary union of the European Union (EMU), Austria's economy is closely integrated with other EU member countries, especially with Germany. On January 1, 1999, Austria introduced the new Euro currency for accounting purposes. In January 2002, Europe notes and coins were introduced and substitute for the Austria/Austrian Schilling.

Privatisation, state participation and labour movements

Many of the country's largest firms were nationalized in the early post-war period to protect them from Soviet takeover as war reparations. For many years, the government and its state-owned industries conglomerate played a very important role in the Austrian economy. However, starting in the early 1990s, the group was broken apart, state-owned firms started to operate largely as private businesses, and a great number of these firms were wholly or partially privatized. Although the government's privatization work in past years has been very successful, it still operates some firms, state monopolies, utilities, and services. The new government has presented an ambitious privatization program, which, if implemented, will considerably reduce government participation in the economy. Austria enjoys well-developed industry, banking, transportation, services, and commercial facilities.

Austria has a strong labour movement. The Austrian Trade Union Federation (ÖGB) comprises constituent unions with a total membership of about 1.5 million--more than half the country's wage and salary earners. Since 1945, the ÖGB has pursued a moderate, consensus-oriented wage policy, cooperating with industry, agriculture, and the government on a broad range of social and economic issues in what is known as Austria's "social partnership." The ÖGB has often opposed the Schüssel government's program for budget consolidation, social reform, and improving the business climate, and indications are rising that Austria's peaceful social climate could become more confrontational.

Agriculture, industry and services

Austrian farms, like those of other west European mountainous countries, are small and fragmented, and production is relatively expensive. Since Austria's becoming a member of the EU in 1995, the Austrian agricultural sector has been undergoing substantial reform under the EU's Common Agricultural Policy (CAP). Although Austrian farmers provide about 80% of domestic food requirements, the agricultural contribution to gross domestic product (GDP) has declined since 1950 to less than 3%.

Although some industries are global competitors, such as several iron and steel works, chemical plants and oil corporations that are large industrial enterprises employing thousands of people, most industrial and commercial enterprises in Austria are relatively small on an international scale.Most important for Austria is the service sector generating the vast majority of Austria's GDP. Vienna has grown to finance and consulting metropole and has established itself as the door to the East within the last decades. Viennese law firms and banks are among the leading corporations in business with the new EU memberstates. Very important for Austria's economy is tourism, both winter and summer tourism; It's the 10th most visited country in the world with over 18,2 million tourists in 2001. Tourism accounts for around 10% of Austria's GDP. [cite web | title = Trade and Industry in Austria, Exports, Tourism | url = http://www.austria.info/xxl/_site/uk/_area/417080/_subArea/417098/home.html | publisher = www.austria.info | date = 2007 | accessdate = December 20 | accessyear = 2007] Its dependency on German guests has made this sector of Austrian economy very dependent on German economy, however recent developments have brought a change, especially since winter ski resorts such as Arlberg or Kitzbühel are now more and more frequented by Eastern Europeans, Russians and Americans.

Trade position

Trade with other EU countries accounts for almost 66% of Austrian imports and exports. Expanding trade and investment in the emerging markets of central and eastern Europe is a major element of Austrian economic activity. Trade with these countries accounts for almost 14% of Austrian imports and exports, and Austrian firms have sizable investments in and continue to move labor-intensive, low-tech production to these countries. Although the big investment boom has waned, Austria still has the potential to attract EU firms seeking convenient access to these developing markets.

Total trade with the United States in 1999 reached $6.6 billion. Imports from the United States amounted to $3.7 billion, constituting a U.S. market share in Austria of 5.4%. Austrian exports to the United States in 1999 were $2.9 billion or 4.6% of total Austrian exports.

tatistics

GDP Totals and Growth from 2002 - 2006 (estimated):

Electricity - production:58.75 TWh (2001)

Electricity - production by source:
"fossil fuel:"31.46%
"hydro:"65.92%
"nuclear:"0%
"other:"2.62% (1998)

Electricity - consumption:54.85 TWh (2001)

Electricity - exports:14.25 TWh (2001)

Electricity - imports:14.47 TWh (2001)

Agriculture - products:grains, potatoes, sugar beets, wine, fruit; dairy products, cattle, pigs, poultry; lumber

Exports - commodities:machinery and equipment, motor vehicles and parts, paper and paperboard, metal goods, chemicals, iron and steel; textiles, foodstuffs

Imports - commodities:machinery and equipment, motor vehicles, chemicals, metal goods, oil and oil products; foodstuffs

Austrian companies

Austrian companies enjoying an important position in their respective international market are e.g. Wienerberger, OMV, Red Bull, Swarovski, Doppelmayr, Glock, Steyr Mannlicher and Atomic. See List of Austrian companies

References

*factbook
*StateDept

ee also

* [http://www.oecd.org/austria/ OECD's Austria country Web site] and [http://www.oecd.org/eco/surveys/austria/ OECD Economic Survey of Austria]
*Economy of Europe
*Austrian School of Economics
*Commemorative coins of Austria

External links

* [http://www.austriacreditscoreonline.co.uk Austrian online magazine about Austrian credit, bank, loan, finance, money and economy news in English language]
* [http://finance.yahoo.com/q/bc?s=%5EATX&t=my&l=off&z=m&q=l&c=%5EGSPC ATX-INDEX VIENNA (%5EATX)]
* [http://www.literature.at/elib/www/wiki/index.php/Erfolgsfaktoren_und_Misserfolgsfaktoren_von_Jungunternehmern_in_%C3%96sterreich_%28Thomas_Prugger%29 Thomas Prugger, Factors for Success and Failure of "Young Entrepreneurs" in Austria, Dissertation in German, 2003 (eLib Austria Project, eLib Full Text)]
* [http://www.theglobalguru.com/article.php?id=61&offer=GURU001 Article by Nicholas Vardy, Global Investment Expert, on Austria's Economic Growth into 2006]