AustrianEconomy Bank Austria Economics & Market Analysis Austria
May 2014
Austrian Economy
Overview 2012
Revision 1)
2013
Revision 1)
2014
Revision 1)
2015
GDP (real, in %)
0.9
0.4
2.0
2.1
Inflation (CPI in %)
2.4
2.0
1.7
1.9
Revision 1)
1) Revision since the last report of April 2014
● Moderate GDP growth of 0.3 per cent in the first quarter of 2014 – growth of 2 per cent for 2014 as a whole still within reach Based on recent official estimates, Austria’s economy grew by 0.3 per cent in the first quarter of 2014 compared with the preceding quarter. This means that economic recovery continues, though more slowly than we expected. Given the moderate increase in the early part of 2014, the risk that actual growth will fall short of our forecast has risen. But with a strong second quarter, economic growth of up to 2 per cent is possible in 2014.
● Inflation at 1.7 per cent in April year-on-year – increase in consumer prices expected to remain below 2 per cent in the coming months In April, consumer prices were up by 1.7 per cent year-on-year. The main drivers were housing, water and energy. The harmonised consumer price index rose by 1.6 per cent year-on-year, which means that the inflation rate in Austria is higher than in any other member state of the European Union. While inflation in Austria will continue to exceed the EU average, also as a result of tax increases, the rate will remain moderate. We expect to see an average inflation rate of 1.7 per cent for 2014 as a whole.
● Retail sales rose in the first quarter – prospects of real growth in 2014 Seasonally adjusted data show slight month-on-month growth of retail sales in February and March in real terms, after a strong increase in January. As long as there are no signs of a turnaround in labour market trends, consumers will show little propensity to buy. However, the prospects for retail sales are improving on the back of low inflation. This means that for the first time in three years, 2014 may see real growth in retail sales, even if this is moderate.
● Significant increase in unemployment in April – turnaround delayed by an increase in the labour force and by moderate economic growth Although employment rose in April, the unemployment rate also continued to increase. Labour market data stabilised during the mild winter, but this development did not continue in spring 2014. The seasonally adjusted unemployment rate climbed to 8.3 per cent in April. A sustainable turnaround on the labour market is only possible if the Austrian economy gains momentum. We believe that the situation on the Austrian labour market will not ease before the second half of the year. For 2014 we now expect the unemployment rate to average 8.1 per cent (5 per cent according to EU criteria).
Bank Austria Economics & Market Analysis Austria
page 2
Austrian Economy
● Austrian industry continues to expand – output growth may reach 4 per cent in 2014 The Bank Austria Purchasing Managers’ Index rose by 0.4 points to 51.4 points in April. The indicator is thus signalling slightly higher growth of industrial output in Austria compared with the preceding month. Austrian industry still enjoys further growth potential, and a recent survey among industrial companies in Austria indicates a stable upward trend which appears to be sustainable. We believe that in this environment, Austria’s industrial sector will benefit from a sustainable recovery in 2014 and we continue to expect Austrian industry to grow by 4 per cent in the current year.
● Slight increase in demand for exports – but growing imports will translate into a higher trade deficit in 2014 The first two months of 2014 saw slightly higher demand for Austrian exports. From January to February 2014, exports of goods grew by an average 1.1 per cent year-on-year. Demand for imported consumer goods and capital goods rose more strongly, by 4.2 per cent compared with the previous year. As a result, the trade deficit increased significantly, to EUR 1.3 billion, in the early part of 2014 (1-2/2013: EUR 0.7 billion).
● Bank support measures increase the budget deficit for 2014 and public debt – structural new borrowing declines moderately We see risks in connection with the full implementation of the various measures planned by the Austrian government. We therefore expect the budget deficit for 2014 to be slightly higher, at 2.8 per cent of GDP, than the government figure, declining to 1.5 per cent of GDP in 2015. We believe that public debt will rise to 79.4 per cent of GDP in 2014, reflecting new borrowing and the measures to stabilise financial markets (including EUR 17.8 billion for the establishment of a “bad bank”). Public debt measured as a percentage of GDP is not expected to decline before 2015.
Economic Forecast 2009 2010
2011
2012
forecast BA 2013 2014
2015
Real change in %
GDP Private consumption Public consumption Gross fixed capital formation*) Investments in plant and machinery Investments in construction
Exports Imports
-3.8 0.9 0.7 -7.8 -10.8 -7.1 -15.6 -13.6
1.8 2.0 0.2 -1.4 2.1 -3.9 9.4 9.1
2.8 0.8 0.3 8.5 14.3 2.5 6.6 7.6
0.9 0.5 0.2 1.6 2.1 2.5 1.2 -0.3
0.4 -0.2 0.1 -0.9 -3.1 0.7 2.8 0.6
2.0 0.7 1.0 3.7 5.7 1.6 5.5 4.7
2.1 0.8 0.6 4.1 6.1 2.0 4.4 4.2
0.5 0.4
1.9 1.7
3.3 3.6
2.4 2.6
2.0 2.1
1.7 1.7
1.9 1.9
7.5 9.7 2.7 3.4 3,234 3,260 -1.5 0.8 7.2 6.9 4.8 4.4 260 251 -4.1 -4.5 69.2 72.5 276 285
4.9 1.6 3,323 1.9 6.7 4.2 247 -2.5 73.1 299
7.3 2.4 3,370 1.4 7.0 4.3 261 -2.6 74.4 307
8.4 2.7 3,392 0.6 7.6 4.9 287 -1.5 74.5 313
9.3 2.9 3,427 1.0 8.1 5.0 312 -2.8 79.4 325
9.5 2.8 3,471 1.3 7.9 4.8 305 -1.5 77.8 338
CPI (change in %) HCPI (change in %) Current account (in EUR bn)***) Current account (in % of GDP)***) Employment in ´000s**) change in %
Unemployment rate (nat. def.) Unemployment rate (EU def.) Unemployed (annual average in 1,000) General gov. balance (in % of GDP)***)****) Public-sector debt (in % of GDP)***)****) Nominal GDP (in euro bn) *) excluding changes in inventory ***) 2013 estimate
**) excluding persons drawing maternity benefits, military service and training ****) incl. Bank support measures after 2013 but without ESA 2010 changes
Source: Bank Austria Economics & Market Analysis Austria
Bank Austria Economics & Market Analysis Austria
page 3
Author: Walter Pudschedl Imprint Published by UniCredit Bank Austria AG Economics & Market Analysis Austria Schottengasse 6-8 1010 Vienna Telephone +43 (0)50505-41957 Fax +43 (0)50505-41050 E-Mail: econresearch.austria@unicreditgroup.at As of 21 May 2014
Austrian Economy
Contents 5
Economic growth – moderate growth in the first quarter
5
Bank Austria Business Indicator – stable recovery in the spring
6
Inflation – stable increase of 1.7 per cent in April year-on-year
7
Retail sales – moderate tailwind at the beginning of the year
7
Labour market – unemployment rises in April
8
Industrial production – loss in momentum after strong start to the year
9
Foreign trade – recovery in Europe supports moderate export growth
10 Budget – Maastricht deficit rising significantly in 2014
Annex Forecast Data on Austrian Economy Charts on the Austrian economy Financial markets (including forecasts) Selected indicators Disclaimer / Imprint
Bank Austria Economics & Market Analysis Austria
page 4
Austrian Economy
In detail Economic growth GDP growth of 0.3 per cent in Q1 2014 compared with Q4 2013
According to recent offical estimates, Austria’s economy grew by 0.3 per cent in the first quarter of 2014 compared with the previous quarter. Exports increased by 1.5 per cent, driven by stronger foreign demand reflecting the economic recovery in Europe (Q4 2013: +1.3 per cent compared with Q3 2013), while imports grew by 1.1 per cent, more strongly than in the previous quarter (+0.7 per cent). Nevertheless, net exports strongly supported growth, though they were slightly lower than in the final quarter of 2013. Trends in domestic demand fell short of our expectations. Both private consumption and gross fixed capital formation expanded by only 0.1 per cent quarter-on-quarter.
ECONOMIC RECOVERY IN AUSTRIA REMAINS MODERATE IN EARLY 2014 GDP
GDP
(real change, qoq and yoy)
(real, yoy change in %) 3.0 2.8
2.5
2.8
2.0
2.0 1.5
qoq, seasonal adjusted (right scale)
3.0
forecast
2.0
yearly average 2.0
1.8
2.1
1.0
2.1
1.8
1.0
0.5 0.4
0.9
1.0 0.0
0.9
0.5
1.5
0.0
0.4
0.0
-1.0
2010
2011
2012
2013
2015
-0.5 2010
2011
2012
2013
2014
2015
Source: Statistik Austria, Wifo, Bank Austria Economics & Market Analysis Austria
Source: Bank Austria Economics & Market Analysis Austria
GDP growth of about 2 per cent possible in 2014/2015, despite a moderate start to the year
2014
Outlook The recent estimates for the first quarter of 2014 were accompanied by a substantial revision of data for 2013. The lower-than-expected figures for the first quarter of 2014 should therefore be seen in light of an upward revision of economic growth in the second half of 2013. This means that our growth forecast of 2 per cent for 2014 is still within reach. Moreover, we are sceptical about the most recent flash estimate as currently available data on industrial output, the Purchasing Managers’ Index and retail sales figures present a more lively picture of the economy. For this reason we believe that first-quarter figures may be revised upwards later on and/or the second quarter will show a stronger performance. In any case, we believe that the pace of recovery in Austria will soon gain momentum. Economic growth of 2 per cent in 2014 as a whole is possible, despite a moderate start to the year. We still look for GDP growth of 2.1 per cent in 2015. (19 May 2014)
Bank Austria Business Indicator Unchanged at 1.0 points in April
The Bank Austria Business Indicator, at 1.0 points in April, remained unchanged compared with the previous month. None of the components currently indicates any major positive or negative change in sentiment. Factors of uncertainty, including the Ukraine crisis, had hardly any impact on sentiment indicators or were outweighed by positive influences, such as those from European peripheral countries. Austrian industry was the only sector where confidence declined slightly, although it benefited from some tailwind from Europe.
Bank Austria Economics & Market Analysis Austria
page 5
Austrian Economy
BANK AUSTRIA BUSINESS INDICATOR SIGNALS GROWTH, BUT THE ECONOMY HAS NOT YET GATHERED MOMENTUM Bank Austria Business Indicator
Bank Austria Business Indicator Industry confidence
industry confidence EU
2 1 0 -1 -2 -3 -4 01/09
01/10
01/11
01/12
GDP (real; yoy change in %)
consumer confidence
01/13
01/14
Source: Statistik Austria, Wifo, Bank Austria Economics & Market Analysis Austria, own calculations
Bank Austria Business Indicator
5 4 3 2 1 0 -1 -2 -3 -4 -5 -6
5 4 3 2 1 0 -1 -2 -3 -4 -5 -6
01/09
01/10
01/11
01/12
01/13
01/14
Source: Statistik Austria, Wifo, Bank Austria Economics & Market Analysis Austria, own calculations
Outlook Although the Bank Austria Business Indicator is stagnant, we believe that economic growth will accelerate in the second quarter of 2014. Construction activity is likely to weaken as weather conditions return to normal. But this should be offset by increased energy production, which was affected by the mild winter. Exports will continue to be driven by higher levels of economic activity in Europe as the year progresses; domestic demand in particular will benefit strongly from this momentum, providing strong impetus to growth. The recovery of investment activity will increasingly be reflected in higher employment. Employment growth accelerated already in the first few months of 2014. Private consumption is expected to pick up, although this trend is still affected by rising unemployment as the labour force increases. (19 May 2014)
Outlook for Austria’s economy improves as recovery in Europe becomes more tangible
Inflation The inflation rate in April was 1.7 per cent compared with the previous year. Housing, water and energy had the strongest impact in this connection, mainly due to higher rents for apartments. Inflation was also driven by food prices, though less strongly than in March. Transport continued to have a dampening effect on inflation, but this effect weakened as the year-on-year decline in fuel prices was offset by various factors including a significant rise in the enginerelated insurance tax compared with the previous year. The harmonised inflation rate rose from 1.4 per cent to 1.6 per cent in April year-on-year. This means that inflation in Austria is higher than in any other EU country.
In March, inflation was stable at 1.7. per cent yearon-year
IN THE PERIOD FROM JANUARY TO APRIL 2014, INFLATION IN AUSTRIA AVERAGED ONLY 1.6 PER CENT YEAR-ON-YEAR Inflation
Inflation
(with effects resulting from goods contained in the basket) Transport
Housing, water, energy
Food
Other effects
Total CPI
4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% 01/08
4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5%
01/09
01/10
01/11
01/12
Source: Statistik Austria, Bank Austria Economics & Market Analysis Austria
Bank Austria Economics & Market Analysis Austria
01/13
01/14
CPI (yoy change in %)
4.0
forecast
3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5
01/09
01/10
01/11
01/12
Source: Statistik Austria, Bank Austria Economics & Market Anaylsis Austria
page 6
01/13
01/14
01/15
Austrian Economy
Outlook We maintain our assumption that consumer prices will continue to rise very slowly, at rates of well below two per cent. Increases in taxes and fees in March are among the reasons why the inflation rate is not as low as in most other EU countries. Moreover, inflation will accelerate slightly later in the year as economic recovery gathers momentum. Overall, inflation is expected to average 1.7 per cent in 2014, which is below the multi-year Austrian average. (19 May 2014)
Moderate inflationary pressure through higher fees and taxes
Retail sales Slight improvement in retail sales at the beginning of 2014
After ending 2013 on a relatively weak note, developments in the retail segment were again encouraging in early 2014. In the first two months, retail sales rose by an average 0.6 per cent in real terms year-on-year. The real 2.7 per cent decline in March compared with the previous year was due to the fact that Easter business was reflected in the April figures this year. Seasonally adjusted data show that strong growth in January was followed by slight real increases in retail sales in February and March compared with the preceding month.
SLIGHT INCREASE IN RETAIL SALES ALTHOUGH CONSUMER SENTIMENT IS STILL BELOW THE MULTI-YEAR AVERAGE Consumer Confidence
Retail Trade
Retail sales, real (seasonal adj., 2000=100) 12 months average
consumer confidence indicator 110
15 10
108
5 0
106
-5 104
-10 -15
102
-20 -25 01/09
07/09
01/10
07/10
01/11
07/11
01/12
07/12
01/13
07/13
01/14
Source: Statistik Austria, Bank Austria Economics & Market Analysis Austria
Brighter prospects for 2014
100 01/09
07/09
01/10
07/10
01/11
07/11
01/12
07/12
01/13
07/13
01/14
Source: Statistik Austria, Bank Austria Economics & Market Analysis Austria
Outlook The high unemployment rate continues to dampen sentiment among Austrian consumers. While sentiment has stabilised since the beginning of 2014, consumer confidence remains well below the multi-year average. Consumers will show little propensity to buy as long as there is no discernible turnaround in the labour market. However, the low inflation rate, which will permit real growth in incomes, improves prospects for retail sales. For the first time in three years, 2014 may therefore again see real growth in retail sales, even if this is moderate. (19 May 2014)
Labour market Unemployment increased to 8.3 per cent in April on a seasonally adjusted basis
The stabilisation trend in Austria’s labour market at the turn of the year 2013/2014 was primarily attributable to the mild winter. In April, labour market data deteriorated significantly. While employment continued to rise, the number of job seekers increased at an accelerated rate as the labour force was growing. The seasonally adjusted unemployment rate, which did not rise during the winter, increased to 8.3 per cent in April. With the inclusion of persons on training courses the unemployment rate rose to 10.1 per cent.
Bank Austria Economics & Market Analysis Austria
page 7
Austrian Economy
SIGNIFICANT RISE IN UNEMPLOYMENT IN APRIL 2014, BUT EMPLOYMENT ALSO INCREASES Labour Market
Unemployment Rate (national and Eurostat, seasonal adjusted)
vacancies (absolut, s.a., right scale)" Employment excluding persons drawing maternity benefits, military service and training (in 1,000, s.a.)
national definition
Eurostat definition
3500
50000
9
9
3450
45000
8
8
3400
40000
7
7
6
6
5
5
4
4
3
3
2
2 1
3350
35000
3300
30000
3250
25000
3200
20000
3150
15000
1
3100
10000
0
01/09
01/10
01/11
01/12
01/13
01/14
0 01/09
Source: HVSV, Bank Austria Economics & Market Analysis Austria
01/10
01/11
01/12
01/13
01/14
Source: Eurostat, Statistik Austria, Bank Austria Economics & Market Analysis Austria
Outlook As expected, the optimism prompted by a stabilisation of the labour market was premature. The Austrian economy needs to gather momentum to prompt a sustainable turnaround in the labour market. We still believe that the situation in the labour market will not improve before the middle of the year, especially as demographic developments and migration from the young EU economies (Romania, Bulgaria) are likely to lead to a rise in the labour force. Following the significant increase in spring 2014, we expect the unemployment rate to rise further as the year progresses, to 8.1 per cent (or 5 per cent according to EU criteria). (19 May 2014)
Sustainable turnaround expected before the summer
Industrial production After the very strong start to 2014, Austria’s industry has experienced a more moderate recovery since March. However, growth is now accelerating slightly. In April, the Bank Austria Purchasing Managers’ Index rose by 0.4 points to 51.4 points. The indicator is thus signalling slightly higher growth of industrial output in Austria compared with the preceding month. A level just above the growth threshold of 50 points currently indicates a moderate expansion of manufacturing industry in Austria. But it should be noted that an upward trend was recorded in each of the past nine months. August 2013 was the first month in the current cycle in which the index rose to a level above the growth threshold of 50 points.
Growth in Austria’s industrial sector continues, though at a lower rate than in early 2014
BANK AUSTRIA’S PMI RISES TO 51.4 POINTS IN APRIL: OUTPUT GROWTH BASED ON STABLE ORDER POSITION Industry
Bank Austria Purchasing Managers' Index seasonally adjusted
not adjusted
65
65
60
60
55
55
50
50
45
45
40
40
35
35
30
30 2009
2010
2011
2012
Source: Markit Economics, Bank Austria Economics & Market Analysis Austria
Bank Austria Economics & Market Analysis Austria
2013
2014
70
EMI Production (left-hand scale) Industrial Production (2008=100, seasonal adjusted; right-hand scale)
120
60
110
50
100
40
90
30 01/09
80 01/10
01/11
01/12
Source: Statistik Austria, Markit Econonomics, Bank Austria Economics & Market Analysis Austria
page 8
01/13
01/14
Austrian Economy
Continued recovery in the euro area signals a favourable trend in Austrian industry in the spring
Outlook Austrian industry still enjoys further growth potential, and a recent survey among industrial companies in Austria indicates a stable upward trend which appears to be sustainable. This view is supported by two trends: the ratio of the index for new business to the index for inventory has been favourable for a year now; this ratio has always been a reliable leading indicator of trends in industrial production. On the other hand, international counterparts of the Austrian Purchasing Managers’ Index came as a pleasant surprise in April, promising favourable developments in Austria’s (supplier) industry in spring 2014. In particular, the Purchasing Managers’ Index for the euro area rose by 0.3 points to 53.3 points in April, driven by positive survey data in Germany, the most important trading partner of Austria’s industrial sector. The recovery in the euro area is gathering momentum and can absorb the impacts resulting from of a strengthening euro, an aggravation of the Ukraine crisis, and the economic slowdown in China and other emerging markets. We believe that in this environment, Austrian industry will benefit from a sustainable recovery in 2014. We maintain our growth forecast of 4 per cent for the industrial sector in Austria in the current year. (19 May 2014)
Foreign trade The first two months of 2014 saw a slight increase in demand for Austrian products, reflecting the economic recovery in Europe. From January to February 2014, Austria’s merchandise exports grew by an average 1.1 per cent year-on-year. Demand for imported consumer goods and capital goods rose more strongly, by 4.2 per cent compared with the previous year. As a result, the trade deficit increased significantly, to EUR 1.3 billion, in early 2014 (1-2/2013: EUR 0.7 billion).
Export demand has risen since the beginning of 2014, but import growth has been even stronger
MODERATE EXPORT DEMAND AND SIGNIFICANT GROWTH IN IMPORTS IN EARLY 2014 Balance of trade
Exports and imports
(monthly figures, EUR mn)
(monthly figures, EUR mn) Exports, s.a.
Exports trend
Imports, s.a.
Imports trend
11,500
200
11,000 10,500
-200
Balance of trade, s.a.
0
10,000
-400
9,500 9,000
-600 -800
8,500
-1,000
8,000 7,500
-1,200 -1,400
7,000 01/09
Balance of trade
01/10
01/11
01/12
Source: Statistik Austria, Bank Austria Economics & Market Analysis Austria
Trade deficit rises
01/13
01/14
01/09
01/10
01/11
01/12
01/13
01/14
Source: Statistik Austria, Bank Austria Economics & Market Analysis Austria
Outlook According to a survey among purchasing managers, demand for Austrian exports increased in the past months, but growth lost some momentum at the beginning of the second quarter of 2014. The currently moderate outlook for an acceleration of merchandise exports will improve as the recovery in Europe gathers momentum in the remaining part of the year. Stronger demand for imports will lead to a higher trade deficit in 2014 compared with the previous year. The current account surplus is nevertheless expected to grow slightly, due to a higher surplus on invisibles. (19 May 2014)
Bank Austria Economics & Market Analysis Austria
page 9
Austrian Economy
Budget At the end of April, Finance Minister Michael Spindelegger presented the draft budget for 2014 – with some delay due to the fact that following the general elections held in autumn 2013, the new government was not formed until December 2013– and also the draft budget for 2015. Based on the budget figures for 2014, Austria’s Maastricht deficit will be EUR 8.7 billion or 2.7 per cent of GDP. The increase over the previous year (1.5 per cent of GDP) is mainly due to additional expenditure on financial market stabilisation measures (relating to Hypo-Alpe-Adria Bank in particular). The establishment of a “bad bank” for HAA and recapitalisation amounting to EUR 750 million burden the 2014 Maastricht deficit with about EUR 4 billion. This one-off effect is not reflected in the trend in the structural budget deficit, which is to decline from 1.1 per cent in 2013 to 1 per cent in 2014 and 0.9 per cent of GDP in 2015. It will only be one year later, in 2016, that the structural budget deficit, at 0.4 per cent of GDP, will meet the mediumterm objective specified by the European Commission. Almost EUR 1.5 billion or 51 per cent of the deficit reduction will be realised through spending cuts which have already been defined (increase in the actual retirement age, cuts in discretionary spending). Tax increases, some of which were implemented in March (e.g. tobacco tax, engine-related insurance tax), account for almost EUR 1.5 billion of the planned reduction of the budget deficit. In this context it is highly uncertain whether the government will achieve its budgeted revenue of an annual EUR 500 million from a financial transaction tax beginning in 2016.
Significant increase in budget deficit for 2014
PUBLIC DEBT RISES TO ALMOST 80 PER CENT BY THE END OF 2014 AS A RESULT OF FINANCIAL MARKET STABILISATION MEASURES Tax revenues
Public Households
(average monthly revenues, 2008=100) Tax revenues, total
(in % of GDP)
Payroll tax
Corporate income tax
VAT
120
New debt
Total debt (right-hand scale) 80
5
79.4
4
110
74.4 72.5
3
100
69.2
90
2
80
4.1
77.8
73.1
70
4.5
65 2.5
1
2.8
2.6 1.5
70
1.5
0
60 01/09
01/10
01/11
01/12
Source: BMF, Bank Austria Economics & Market Analysis Austria
Significant increase in public debt to almost 80 per cent of GDP at the end of 2014
01/13
01/14
75
74.5
60 55
2009
2010
2011
2012
2013
2014
2015
Source: BMF, Statistik Austria, Bank Austria Economics & Market Analysis Austria
Outlook We see risks in connection with the full implementation of the various measures planned by the Austrian government. We therefore expect the budget deficit for 2014 to be slightly higher, at 2.8 per cent of GDP, than the government figure, declining to 1.5 per cent of GDP in 2015. The draft budgets for 2014 and 2015 and the long-term budget plan for the period until the end of 2018 do not include any major structural changes. A more ambitious consolidation of the budget would be desirable, especially in 2015, as this would require sustainable reforms. On the other hand, Austria’s debt position is relatively favourable and more stringent budget consolidation would involve disproportionately high economic risks. We believe that public debt will rise to 79.4 per cent of GDP in 2014, reflecting new borrowing and financial market stabilisation measures (including EUR 17.8 billion for the establishment of a “bad bank”). Public debt measured as a percentage of GDP is not expected to decline before 2015. (20 May 2014)
Bank Austria Economics & Market Analysis Austria
page 10
Austrian Economy - Forecast Inflation (yoy, in %)
GDP (real) 4 3 2 1 0 -1 -2 -3 -4 -5
4
2.8
2.1
2.0
1.8
1.4
0.9
0.4
forecast
-3.8 2008
2009
2010
2011
2012
2013
2014
2015
forecast forecast
3
3
2
2
1
1
0
0
-1 01/08 01/05
-1 01/09 01/07 01/10 01/08 01/1101/09 01/12 01/06 01/1001/13 01/11 01/14 01/12 01/15 01/13
forecast 2013 2014
2009
2010
2011
2012
-3.8 0.9 0.7 -7.8 -10.8 -7.1 -15.6 -13.6
1.8 2.0 0.2 -1.4 2.1 -3.9 9.4 9.1
2.8 0.8 0.3 8.5 14.3 2.5 6.6 7.6
0.9 0.5 0.2 1.6 2.1 2.5 1.2 -0.3
0.4 -0.2 0.1 -0.9 -3.1 0.7 2.8 0.6
2.0 0.7 1.0 3.7 5.7 1.6 5.5 4.7
2.1 0.8 0.6 4.1 6.1 2.0 4.4 4.2
CPI (change in %) HCPI (change in % )
0.5 0.4
1.9 1.7
3.3 3.6
2.4 2.6
2.0 2.1
1.7 1.7
1.9 1.9
Employment (change in %)*) Unemployment rate (nat. def.) Unemployment rate (EU def.)
-1.5 7.2 4.8
0.6 6.9 4.4
1.8 6.7 4.2
1.3 7.0 4.3
0.5 7.6 4.9
1.0 8.1 5.0
1.3 7.9 4.8
General gov. balance (in % of GDP) **) Public sector debt (in % of GDP) **
-4.1 69.2
-4.5 72.5
-2.5 73.1
-2.6 74.4
-1.5 74.5
-2.8 79.4
-1.5 77.8
2012
2013
forecast 2014
2015
Eurozone GDP growth
-0.6
-0.4
1.5
1.7
US GDP growth
2.8
1.9
2.8
2.5
2012
2013
2014
2015
USD per euro
1.29
1.33
1.41
1.46
Crude oil (USD per brl)*
112
109
107
104
10-y gov. bonds
2.29
1.99
2.10
2.80
3-months money
0.57
0.22
0.30
0.38
2015
(Real change in %)
GDP Private consumption Public consumption Gross fixed capital formation Investments in plant and machinery Investments in construction Exports Imports
4
UniCredit Research
(yearly average)
UniCredit Research, Thomson Reuters * Futures
*) excluding maternity/paternity leave, military service and training programmes **) 2013 estimate; incl. the costs of the creation of a publicly-owned institution ("Anstalt") for HAA (government deficit: +1.4 % of GDP in 2014 alone; government debt_ +EUR 13.5bn or 4.1 % of GDP 2014
Economics & Market Analysis Austria
21/05/2014
Austrian Economy - Data 2010 2011 2012 2013
I 13
II 13
III 13
IV 13
I 14
08/13
09/13 10/13
11/13 12/13 01/14 02/14 03/14 04/14
Bank Austria Business Indicator GDP growth (prev. quarter, annualised)
2.3 1.8
2.3 2.8
0.0 0.9
0.4 0.4
0.4 0.0
0.0 0.1
0.2 1.2
1.1 1.6
0.8 1.3
0.5
0.8
1.1
1.2
0.9
0.7
0.8
1.0
1.0
Industrial confidence Eurozone Germany France Italy Netherlands Spain
-4 1 -8 -6 -4 -14
0 8 -1 -4 -1 -13
-12 -8 -14 -16 -8 -18
-9 -6 -13 -12 -6 -14
-12 -12 -15 -16 -9 -16
-13 -13 -16 -16 -8 -15
-8 -9 -11 -11 -6 -13
-4 -5 -8 -7 -3 -12
-4 -4 -7 -5 -3 -9
-8 -4 -11 -12 -5 -13
-7 -3 -11 -9 -5 -11
-5 0 -8 -8 -3 -14
-4 1 -9 -6 -3 -12
-3 1 -7 -6 -4 -9
-4 0 -6 -7 -3 -10
-4 0 -7 -5 -3 -8
-3 1 -8 -5 -2 -10
-4 0 -7 -4 -3 -9
-2
3
-10
-8
-15
-11
-11
-7
-2
-6
-5
-3
-2
-2
-2
-2
-1
-2
56.8 57 58 59 -6
53.5 52 51 53 -2
49.0 48 47 50 -8
50.2 51 51 52 -8
48.4 48.1 47.0 48.3 -9.1
48.1 49.5 49.4 49.1 -12.1
50.7 52.5 53.2 53.0 -8.3
53.7 55.9 54.5 56.6 -4.1
52.7 54.1 52.0 54.3 -3.8
52.0 54 56 54 -8
51.1 51 52 54 -7
52.7 53 54 55 -6
54.3 57 56 57 -3
54.1 58 53 57 -4
54.1 56 53 57 -6
53.0 54 52 55 -3
51.0 52 51 51 -3
51.4 51 50 53 -4
6.9
6.9
-0.4
0.7
1.1
0.5
0.5
0.9
-0.9 0.8
1.5 -0.6
1.0 -0.4
0.5 0.8
1.2 0.0
5.8 4.0
3.9 -1.5
16.7
11.3
1.5
1.5
-0.3
2.9
0.1
3.6
16.5
15.3
0.7
-1.5
-4.6
-1.8
0.3
0.2
-4.3
-8.8
-8.4
-4.5
-7.0
-5.6
-5.6
-4.5
-6.1 0.1 -5.9 -2.3 -5.5
2.2 0.7 3.4 -0.4 -5.6
7.2 0.2 1.2 -0.3 -4.9
-1.9 -1.2 -3.1 1.2 -4.8
5.6 0.5 2.6 -2.8 -4.5
1.0 4.0 0.9 6.3 -4.5
1.3 -2.6 7.6 0.3 -5.2
-15
-8
-5
-13
-11
-12
-15
-14
-12
-20
-5
-18
-19
-14
-13
-14
-14
Bank Austria Industrial confidence Eurozone Bank Austria Purchase Manager´s Index Backlog of work New export orders Output expectations Industrial confidence Austria Industrial output change against previous year change against previous month (saisonal adjusted) Foreign trade Exports (change against previous year in %) Exports (chg. against prev. month, s.a. in %, 3m mov. av.) Imports (change against previous year in %) Imports (chg. against prev. month, s.a. in %, 3m mov. av.) Ex-Im (12m cum., euro bn)
Construction Confidence indicator
-14
21/05/2014
Austrian Economy - Data 2010 2011 2012 2013 Retail trade Confidence indicator 4.8 1.4 Retail trade nom. (change against previous year in %) 4.1 2.5 Retail trade nom. (change against previous year in %, 3mav.) Retail trade real (change against previous year in %) 2.3 -1.2 Retail trade real (chg. against prev. month in %, s.a., 3mav.) Automobile trade nom. (change against prev. year in %) 4.6 8.8 Tourism Overnight stay (change against previous year in %) 0.7 1.1 Labour market Employment*) (change against previous year in %) 0.8 1.9 Employment (s.a., change against previous month in %) Unemployed (change against previous year in ´000) -9.5 -4.1 Unemployment rate (in %, s.a.) 4.5 4.1 Prices CPI (change against previous year in %) 1.9 3.3 HCPI (Change against previous year in %) 1.8 3.6 Prices of raw materials (change against prev. year in %) 30.4 29.5 Crude oil (change against previous year in %) 28.1 31.9 Financial market 3M Euribor 0.81 1.39 10-year government bonds 3.16 3.28 USD per euro 1.33 1.39 Total loans (change against previous year in %, eop) 3.1 2.7 Consumption loans (change against prev. year in %, eop) 5.5 2.4 *) excluding maternity/paternity leave, military service and training programmes
I 13
II 13
III 13
IV 13
I 14
08/13
09/13 10/13
11/13 12/13 01/14 02/14 03/14 04/14
-5.7 2.7 1.9 1.3 0.0 -4.4
-4.4 1.2 2.7 -0.1 -0.1 0.5
-3.6 1.1 1.7 -0.3 -0.3 4.3
-3.9 2.8 1.7 1.6 -0.2 2.8
-6.4 0.9 1.6 -0.7 -0.2 9.3
-6.9 0.8 1.5 -0.3 0.2 0.2
-6.5 2.4 1.4 1.6 0.1 15.9
-6.2 -1.9 0.4 -2.7 0.3
-8.6 1.8
-5.7 1.4
-4.5 3.8
-6.4 3.4
-7.5 0.3
-4.6 -2.9
-6.5 5.4
-6.7
-0.5
-0.2
-2.4
-1.3
0.0
2.3
-1.0
-3.9
-0.2
-6.2
-0.7
0.4
5.5
5.0
0.5
5.4
-7.8
1.2
3.0
-6.4
3.7
-1.8
1.9
2.1
5.1
-3.1
-8.9
-7.1
1.4
0.6
0.7
0.7
0.6
0.5
0.9
13.9 4.3
26.6 4.9
21.0 4.8
21.4 4.8
30.4 4.9
33.4 5.0
30.3 4.9
0.1 -0.1 30.4 5.0
0.8 0.2 32.2 5.0
0.6 0.0 30.4 5.0
0.3 0.0 31.5 5.0
0.8 0.2 38.3 5.0
0.8 0.1 31.4 4.9
1.0 0.2 30.3 4.8
0.8 0.0 29.1 4.9
0.8 0.1 34.4
2.4 2.6 -2.8 0.7
2.0 2.0 -2.0 -0.9
2.5 2.6 -6.4 -6.5
2.1 2.3 -4.1 -3.4
1.8 2.0 1.9 4.5
1.5 1.4 0.9 2.6
1.6 1.5 -2.8 -1.2
1.8 2.0 0.8 2.7
1.7 1.8 0.1 2.4
1.4 1.5 0.3 2.0
1.4 1.5 0.3 1.5
1.9 2.0 1.9 4.1
1.6 1.5 -4.2 -2.9
1.5 1.5 -4.1 -2.6
1.7 1.4 0.0 1.9
1.7 1.6 4.6 6.4
0.57 2.29 1.29 0.1 0.5
0.22 1.99 1.33 -1.1 0.0
0.21 1.86 1.32 -0.2 -0.3
0.21 1.75 1.31 -0.7 -0.7
0.22 2.21 1.33 -1.0 -0.1
0.24 2.15 1.36 -1.1 0.0
0.30 1.98 1.37 -0.6 0.9
0.23 2.21 1.33 -1.1 -0.6
0.22 2.35 1.34 -1.0 -0.1
0.23 2.20 1.36 -0.7 -0.4
0.22 2.08 1.35 -0.8 -0.1
0.28 2.17 1.37 -1.1 0.0
0.29 2.13 1.36 -0.1 0.5
0.29 1.95 1.37 -0.2 0.4
0.31 1.87 1.38 -0.6 0.9
0.33 1.76 1.38
21/05/2014
Austrian Economy - Charts GDP and industrial production
Industrial and consumer confidence
GDP (yoy in %, real; left scale) Industrial production (yoy in %; 3m avg.; right scale)
Industrial confidence
6
20 15 10 5 0 -5 -10 -15 -20
4 2 0 -2 -4 -6 05
06
07
08
09
10
11
12
13
Consumer confidence
20
20
10
10
0
0
-10
-10
-20
-20
-30
-30
-40
-40
14
05
06
07
08
09
10
11
12
13
14
Bank Austria Business Indicator
Austria's exports and imports Imports (yoy in %; 3m avg.)
GDP (yoy in %, real)
Exports (yoy in %; 3m avg.)
Bank Austria Business Indicator
6
6
4
4
10
2
2
0
0
0
-10
-10
-2
-2
-20
-20
-4
-4
-30
-30
30
30
20
20
10 0
05
06
07
08
09
10
11
12
13
14
Economics and Market Analysis -6 05 06 07 08 09
Economics & Market Analysis Austria
-6 10
11
12
13
14
21/05/2014
Austrian Economy - Charts Employment
Unemployed
Employed (excl. matern./patern. leave) - left scale
Unemployed (yoy in 1,000; right scale) Unemployment rate (in %; seasonally adjusted; left scale)
yoy in % excl. matern./patern. leave, military serv. and train. progr. - right scale
6
80
5
60
4
40
3
20
2
0
1
-20
0
-40 05
06
07
08
09
10
11
12
13
3400000
3
3300000
2
3200000
1
3100000
0
3000000
-1
2900000
-2 -3 05
06
07
08
09
10
11
12
13
14
Retail trade
HCPI (yoy in %)
CPI (yoy in %)
5
5
4
4
3
3
2
2
1
1
0
0
-1
-1 06
4
2800000
14
Inflation rate
05
3500000
07
08
09
10
11
12
13
14
Retail trade (yoy in %; real; 3m avg.; left scale) Confidence indicator (right scale) 8 6 4 2 0 -2 -4 -6 -8
24 18 12 6 0 -6 -12 -18 -24 05
06
07
08
Economics & Market Analysis Austria
09
10
11
12
13
14
21/05/2014
Money market 3-M money (in %)
Euro area (in %) 3-M-Euribor
Euribor
Repo
6 5
Marginal lending facility
USD Libor
6
7
7
5
6
6
5
5
4
4
3
3
4
4
3
3
2
2
2
2
1
1
1
0
0
1 Deposit facility
0 05
06
07
08
09
10
11
12
13
14
UK
UKUK
Schweiz
Japan Japan
07
08
09
10
20/05/2014
Japan
Schweiz Switzerland
8 7 66 55 4 4 3 3 2 12 01 0 -1 0106
06
11
12
13
14
Financial forecasts
3-M money (in %) 18 17 16 1 5 1 4 1 03 02 01 00 0-1 00 05
0 05
0207 03 08 04 09 05 1006
07 11
08 12
09 13
1014
Euro-3m money market Forwards Euro-10y German bonds Euro-10y Austrian bonds US$-3m money market Forward US-10y treasuries CHF/Euro Forwards US$/Euro Forwards
0.32 1.36 1.61 0.26 2.51 1.22 1.37
Sep-14 Dec-15 0.30 0.22 1.95 2.21 0.35 0.24 3.20 1.29 1.22 1.43 1.37
0.60 0.38 3.00 3.15 1.25 4.00 1.36 1.50
Source: Datastream, Bloomberg, Bank Austria; Forecast: UniCredit Research
Economics & Market Analysis Austria
21/05/2014
Long-term interest rates 10-Y Government bonds (yield in %)
10-Y Government bonds (yield in %)
US Treasury
UK
Germany
Switzerland
Japan
6.0
6.0
5.0
5.0
5.0
5.0
4.0
4.0
4.0
4.0
3.0
3.0
3.0
3.0
2.0
2.0
2.0
2.0
1.0
1.0
1.0
1.0
0.0
0.0
05
06
07
08
09
10
11
12
13
05
14
10-Y Goverment bonds (yield in %) Austria
4.0 3.0 2.0 1.0 07
08
09
10
08
09
10
11
12
13
14
1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 -0.2 -0.4
5.0
06
07
Interest rate differential Austria - Germany
6.0
05
06
11
12
13
14
05
06
07
08
09
Economics & Market Analysis Austria
10
11
12
13
14 21/05/2014
Equity market USA - Euro area
Germany - Euro area
Dow-Jones (left scale)
Euro-Stoxx 50 (right scale)
DAX 30 (left scale)
Euro-Stoxx 50 (right scale)
10000
5000
9000
4500
8000
4000
7000
3500
18000
7500
16000
6500
14000
5500
12000
4500
6000
3000
10000
3500
5000
2500
8000
2500
4000
2000
6000
1500
3000
1500
05
06
07
08
09
10
11
12
13
05
14
FTSE 100 (left scale)
NIKKEI 225 (right scale)
7000 6500 6000 5500 5000 4500 4000 3500 3000
20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 06
07
08
09
10
11
12
13
14
Austria - Euro area
UK - Japan
05
06
07
08
09
10
11
12
13
14
ATX (left scale)
6000
Euro Stoxx 50 (right scale)
6000
5000
5000
4000
4000
3000
3000
2000
2000
1000
1000 05
06
07
08
09
Economics & Market Analysis Austria
10
11
12
13
14
21/05/2014
Exchange rates USD per Euro
SFR per Euro
1.60
1.60
1.70
1.70
1.50
1.50
1.40
1.40
1.60
1.60
1.30
1.30
1.50
1.50
1.20
1.20
1.40
1.40
1.10
1.10
1.00
1.00
1.30
1.30
0.90
0.90
1.20
1.20
0.80
0.80 05
06
07
08
09
10
11
12
13
06
07
08
09
10
11
12
13
14
GBP per Euro
170 160 150 140 130 120 110 100 90 80
170 160 150 140 130 120 110 100 90 80 06
1.10 05
Yen per Euro
05
1.10
14
07
08
09
10
11
12
13
14
1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 0.60 0.55
1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 0.60 0.55 05
06
07
08
09
Economics & Market Analysis Austria
10
11
12
13
14
21/05/2014
Austrian Economy - Selected indicators Forecast
2008
2009
2010
2011
2012
2013
2014
2015
GDP (real) Industrial output (real) Gross fixed capital formation (real) CPI (yearly average) Unemployment rate (yearly average) General gov. balance (in % of GDP) *) GDP (nom., Euro bn) Per capita GDP (in euro)
1.4 1.0 0.7 3.2 3.8 -0.9 282.7 33,916
-3.8 -12.7 -7.8 0.5 4.8 -4.1 276.2 33,030
1.8 6.9 -1.4 1.9 4.4 -4.5 285.2 33,998
2.8 6.6 8.5 3.3 4.2 -2.5 299.2 35,535
0.9 -0.4 1.6 2.4 4.3 -2.6 307.0 36,320
0.4 0.7 -0.9 2.0 4.9 -1.5 313.2 36,900
2.0 4.0 3.7 1.7 5.0 -2.8 325.2 38,157
2.1 3.5 4.1 1.9 4.8 -1.5 338.3 39,522
in EUR mn Merchandise exports Merchandise imports Current account balance Current account balance (in % of GDP) Foreign direct investment (inflow, net) Gross foreign debt (end of period) Gross foreign debt (in % of GDP)
117,526 119,568 13,757 4.9 4,682 596,517 211.0
93,739 97,574 7,487 2.7 6,697 577,590 209.1
109,373 113,652 9,740 3.4 634 598,302 209.8
121,774 131,008 4,900 1.6 7,638 612,372 204.6
123,544 131,982 7,328 2.4 4,483 615,418 200.5
125,412 129,962 8,448 2.7 8,500 610,418 194.9
134,789 138,785 9,300 2.9 8,500 620,418 190.8
143,393 147,361 9,500 2.8 8,500 630,418 186.4
1.37
1.39
1.33
1.39
1.29
1.33
1.41
1.46
Change against prev. year in %
EUR/USD (yearly average)
*) 2013 estimate; incl. costs of the creation of a publicly-owned institution ("Anstalt") for HAA estimated to increase the budget deficit 2014 by 1.4 % of GDP
Source: Bank Austria Economics & Market Analysis Austria, OeNB, Wifo, UniCredit Research
Economics & Market Analysis Austria
21/05/2014
Disclaimer and Imprint
We invite you to visit the economic analyses on Bank Austria´s website: www.bankaustria.at under "Markets & Research" in the section "Economic Research Austria" or directly at http://www.bankaustria.at/en/about-us-publications-economic-researchaustria.jsp If you would like to receive information on our most recent publications by e-mail, please subscribe to the newsletter Bank Austria EconomicNews on the website. If you have further questions, please send us an e-mail to econresearch.austria@unicreditgroup.at
Disclaimer of liability: This publication is neither a marketing communication nor a financial analysis. It contains information on general economic data. Despite careful research and the use of reliable sources, we cannot assume any responsibility for the completeness, correctness, up-to-dateness and accuracy of information contained in this publication. The opinions of the authors do not necessarily reflect those of Bank Austria and those of the companies which have engaged the services of the authors. The information contained in this publication is not to be interpreted as an offer or invitation for the sale or purchase of securities of any kind. We reserve the right to modify the views expressed in this publication at any time without prior notification. This information should not be interpreted as a recommendation to buy or sell financial instruments, or as a solicitation of an offer to buy or sell financial instruments. This publication serves information purposes only and does not replace specific advice taking into account the investor’s individual personal circumstances (e.g. risk tolerance, knowledge and experience, investment objectives and financial circumstances). Past performance is not a guide to future performance The information in this publication contains assessments of short-term market developments. We have obtained value data and other information from sources which we deem reliable. Our information and assessments may change without notice."
Imprint. Disclosure according to Sections 24 and 25 of the Austrian Media Act (Mediengesetz - MedienG): Published by: UniCredit Bank Austria AG 1010 Vienna, Schottengasse 6 – 8, which is also the media owner. Business objective: credit institution pursuant to Section 1 (1) of the Austrian Banking Act (Bankwesengesetz) Persons authorised to act on behalf of the media owner (Management Board): Willibald Cernko (Chairman of the Management Board), Gianni Franco Papa (Deputy Chairman of the Management Board), Helmut Bernkopf, Francesco Giordano, Dieter Hengl, Jürgen Kullnigg, Doris Tomanek, Robert Zadrazil. Supervisory Board of the media owner: Erich Hampel (Vorsitzender des Aufsichtsrates), Paolo Fiorentino (stellvertretender Vorsitzender des Aufsichtsrates), Alessandro Decio, Wolfgang Heinzl, Olivier Nessime Khayat, Johannes Koller, Adolf Lehner, Alfredo Meocci, Roberto Nicastro, Vittorio Ogliengo, Emmerich Perl, Franz Rauch, Karl Samstag, Wolfgang Sprißler, Ernst Theimer, Robert Traunwieser, Barbara Wiedernig. Interests held in the media owner pursuant to Section 25 of the Austrian Media Act: UniCredit S.p.A. holds 99.995% of the shares in the media owner (key details of the shareholder structure of UniCredit S.p.A. are available at https://www.unicreditgroup.eu/en/governance/shareholder-structure.html). “Betriebsratsfonds des Betriebsrats der Angestellten der UniCredit Bank Austria AG, Region Wien” (the Employees’ Council Fund of the Employees’ Council of employees of UniCredit Bank Austria AG in the Vienna area) and “Privatstiftung zur Verwaltung von Anteilsrechten” (a private foundation under Austrian law; founder: Anteilsverwaltung-Zentralsparkasse; beneficiary: WWTF – Wiener Wissenschafts-, Forschungs- und Technologiefonds) have a combined interest of 0.005% in the media owner.
Bank Austria Economics & Market Analysis Austria