Eurozone: Austrian economy recovering but slowly - ING

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 30, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) - Inga Burk, Research Analyst at ING, notes that the preliminary estimate of Austria’s 3Q GDP came in at 0.3% QoQ, from 0.3% QoQ in the second quarter of 2015 and it appears that increased investment was the main growth driver.

    Key Quotes

    “Aside from the moderate growth figures, sentiment indicators draw a rather mediocre to poor picture. Austria’s consumer confidence indicator is in negative territory since August 2011, the industrial confidence indicator has been there even since April 2011.”

    “The only positive signal comes from the services sector. It is therefore not surprising that the economic sentiment indicator was last seen above the magic threshold of 100 in May 2014. Compared to the Eurozone, where the indicator stands at 105.9 in October, there is a long way to go for the Austrian sentiment to catch up with the Eurozone average, momentarily standing at 96.9.”

    “Looking ahead, a strong acceleration is not in sight yet. Private consumption will be given an impetus by the increase in disposable income thanks to the tax reform and the low energy prices, wherefore the Austrian economy will continue its slow catch-up process.”

    “Yet, business confidence and consequently investment still remains too low. If confidence in the government does not return soon, the alpine country will struggle hard to come even close to Eurozone’s midfield. External support continues to come from the weaker euro exchange rate.”

    “However, as Draghi said during last week’s ECB press conference, monetary policy measures alone are not enough to bring the Eurozone back on track. If Austria is not complementing its external stimuli by structural and fiscal policies it might slide back into economic lethargy before even starting to enjoy some positive economic momentum.”
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