2019 OECD ECONOMIC SURVEY OF AUSTRIA Investing in the Future Vienna, November, 13th 2019 http://www.oecd.org/economy/austria-economic-snapshot/
@OECDeconomy @OECD
Weak external demand drags down growth 2018
2019
2020
Gross domestic product
2.3
1.4
1.3
Private consumption
1.1
1.7
1.8
Gross fixed capital formation
3.9
2.9
1.5
Exports
5.6
2.1
0.6
Imports
4.4
2.2
1.2
Unemployment rate (%)
4.8
4.6
4.5
Consumer price index
2.1
1.6
1.7
Fiscal balance (% GDP)
0.1
0.1
0.2
Public debt (Maastricht, % of GDP)
73.8
72.1
70.8
Source: OECD Economic Outlook 2019 Issue 2 projections for Austria. 2
Average incomes are high GDP per capita USD PPP, current prices, 2018 90000 80000 70000 60000 50000 40000 30000 20000 10000 0
OECD
DEU
AUS
DNK
AUT
NLD
ISL
NOR
CHE
IRL
Source: OECD, National Accounts database. 3
Well being is high Well being country rankings Ranking from 1 (best) to 35, 2017 20% top performers
(23)
(23)
(21)
(20)
60% middle performers
(18)
(15)
(14)
(13)
(12)
Subjective well-being
Income and wealth
Job and earnings
(10)
(27)
Civic Work-life engagement balance
Education and skills
Housing
Health Environmental Social status quality network
Personal security
Source: OECD Better Life Index database. 4
6
5
-1 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2
The strong recovery has peaked Real GDP In %, year-on-year change
Austria Germany European Union OECD
4
3
2
1
0
Source: OECD Economic Outlook: Statistics and Projections database. 5
Economic growth has lifted employment Employment rate In %, 15-64 year olds 85
Austria
Denmark
Germany
Netherlands
Sweden
Switzerland
80 75 70
2017
2015
2013
2011
2009
2007
2005
2003
2001
60
1999
65
Source: OECD Economic Outlook: Statistics and Projections database. 6
Public finances are balanced General government balance % GDP 1
Headline balance
0
Structural balance (national definition)
-1 -2 -3 -4 -5 -6 -7
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
Source: OECD Economic Outlook: Statistics and Projections database. 7
Public debt is still relatively high Public debt In % of GDP, Maastricht definition 100 90
100
Austria
Denmark
Germany
Sweden
Netherlands
90
80
80
70
70
60
60
50
50
40
40
30
30
20
20
Source: OECD Economic Outlook: Statistics and Projections database. 8
House prices continue to rise Real house prices Index 2000 = 100
275
Austria
Canada
Denmark
Sweden
Spain
250 225 200 175 150 125 100 75
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Source: OECD Analytical Housing Prices database. 9
Bank capitalisation can be strengthened further Capital to assets ratio of banks In %, 2019Q1 or latest quarter
20 16 12 8
ISL
IRL
EST
USA
MEX
GRC
LVA
CHL
LUX
AUT
ESP
PRT
BEL
AUS
GBR
DNK
FRA
FIN
ITA
DEU
NLD
SWE
0
CAN
4
Source: IMF Financial Soundness Indicators database. 10
Macroeconomic and financial recommendations Let automatic stabilisers operate and consider more active measures if the slowdown gets more severe Continue to reduce the public debt ratio Make the existing macro-prudential recommendations on mortgage lending compulsory Ensure that banks of all sizes are robustly capitalised
11
PREPARING WORKERS FOR THE KNOWLEDGE ECONOMY
Demand for skills are changing Change in share of employment Percentage point change between 1995 and 2015 2019Q1 or latest quarter
20
Low skill
15
Middle skill
High skill
10 5 0 -5 -10
Source: OECD (2018), Job Creation and Local Economic Development 2018: preparing for the Future of Work.
JPN
USA
DEU
FIN
NLD
NOR
GBR
SWE
FRA
DNK
CHE
-20
AUT
-15
13
Digital skills shortages are sizeable Skill shortage in knowledge of computers and electronics Scaled between -1 and 1 (strongest) 2015 or latest 1.0 0.8 0.6 0.4 0.2
FIN
ITA
ESP
AUT
PRT
SVK
NLD
NOR
DNK
CZE
DEU
IRL
GRC
SWE
BEL
SVN
FRA
POL
CHE
HUN
-0.2
GBR
0.0
Source: OECD (2018), OECD Skills for Jobs Database. 14
Gender imbalances prevail Activity status of women by age, cohort population = 100, 2015 or latest year 100
70
70
70
60
60
60
60
50
50
50
50
40
40
40
40
30
30
30
30
20
20
20
20
10
10
10
10
0
0
15.19 20.24 25.29 30.34 35.39 40.44 45.49 50.54 55.59 60.64 65.69 70.74
0
70.74
0
65.69
70
60.64
80
55.59
80
50.54
80
45.49
80
40.44
90
35.39
90
30.34
Retired
90
25.29
Unpaid workers
100
90
20.24
Employed parttime
100
100
15.19
Employed fulltime
Sweden
Austria
Source: OECD Employment Outlook 2018. 15
Activating the skills of migrants Migrants overqualified for job % of highly educated
40
32
24
16
8
0
CHE
NLD
DNK
SWE
DEU
EU
OECD
AUT
Source: OECD/EU (2018), Settling In 2018: Indicators of Immigrant Integration. 16
Recommendations on jobs and skills Involve employer organisations more directly in the design and administration od life-long learning programmes Continue to attract high-skilled foreign workers and retain more foreign graduates of Austria universities Make high quality child care and full-day schooling a legal entitlement in the entire country Strengthen the German language opportunities and the labour force participation potential of migrant families
17
BOOSTING PRODUCTIVITY
Productivity growth has slowed down Labour productivity growth In %, average annual rate 2.5
2006-2018
1995-2006
1.5
0.5
-1.5
GRC LUX ITA NOR FIN AUT JPN CHE BEL GBR DEU NLD DNK HUN FRA SWE CAN PRT NZL CHL SVN ISR AUS USA ESP ISL CZE TUR KOR SVK
-0.5
Source: OECD Statistics and Projections database. 19
Service sectors lag behind Business service sectors Gross value added per hour worked, index 2010=100
2017
2015
80
2017
80
2015
90
2013
90
2011
100
2009
100
2007
110
Germany Netherlands
2013
120
110
2005
Austria Denmark
2011
120
Germany Netherlands
2009
Austria Denmark
130
2005
130
2007
Manufacturing sectors Gross value added per hour worked, index 2010=100
Source: OECD Productivity Statistics (database). 20
Austria lags behind in digitalisation Access to high-speed broadband In % of firms with at least 10 employees, 2017 90 75 60 45 30 15 0
AUT
DEU
NLD
SWE
DNK
Source: European Commission (2019). 21
Product market regulations remain too restrictive Index of product market regulations Index scale from least (0) to most restrictive (6), 2018 2.5
2.5
Austria
OECD
Least regulated
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
Barriers to Trade Admin. Burden on and Investment Start-ups
Involvement in Business Operations
Public Ownership Barriers in Service Simplification and & Network sectors Evaluation of Regulations
0.0
Source: OECD 2018 Product Market Regulation database, July. 22
Corporate financing is biased towards debt Debt-to-equity ratio Non-financial corporations, 2017 1.2 1.0 0.8 0.6 0.4
AUT
ITA
DEU
CAN
GBR
OECD
NOR
FIN
BEL
ESP
NLD
DNK
FRA
USA
SWE
0.0
CHE
0.2
Source: OECD Financial Dashboard. 23
Risk capital markets are underdeveloped Stock market capitalisation % of GDP, 2017 250 200 150 100
CHE
USA
SWE
CAN
DNK
NLD
GBR
FIN
ESP
FRA
BEL
OECD
NOR
DEU
ITA
0
AUT
50
Source: World Bank Development Indicators. 24
Business dynamism is low All enterprises in business economy In % of all enterprises
20
Entry rate
20
Exit rate
PRT
AUS
SVK
LVA
GBR
POL
DNK
SVN
HUN
EST
ESP
LUX
NLD
CZE
ITA
0
DEU
0
FRA
5
FIN
5
NOR
10
SWE
10
AUT
15
BEL
15
Source: OECD Structural and Demographic Business Statistics. 25
Ambitious structural reforms would boost productivity Estimated effect on average firm productivity In % 3.0
3.0 After 3 years
After 5 years
2.5
2.5
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
Regulatory barriers
Easing access to equity and Reducing barriers to digital Increasing e-government venture capital trade use
0.0
Source: OECD calculations based on Sorbe et al. (2019), “Digital Dividends: Policies to Harness the Productivity Potential of Digital Technologies�, OECD Economic Policy Papers, No. 26
26
Recommendations to boost productivity Make the licensing system more open to competition without undermining the quality of services and the training and skill standards of workers Liberalise market entry in rail transportation, road freight and the distribution of pharmaceuticals Modify corporate taxes to reduce disincentive effects and the debt-bias Identify and address the remaining shortages in the ecosystem for equity investments in forms of all sizes. Further draw on the completion of the Capital Market Union Take up measures planned by the previous government to facilitate business transfers Improve the evidence base on business transfers. Increase awareness on the importance of successful transmissions and help disseminate best practices
27
TACKLING ENVIRONMENT CHALLENGES
Energy intensity has not improved Energy intensity ktoe/USD (2010 PPP)
0.16 0.12 0.08
Austria
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0.00
2000
0.04
OECD
Source: OECD Green Growth Indicators database. 29
Urban sprawl in Austria is excessive Average population density in urban areas Number of inhabitants per km2, 2014 5000
Maximum
Average
Minimum
4000 3000 2000 1000 0
AUT
DNK
DEU
SWE
Source: OECD (2018), Rethinking Urban Sprawl: Moving Towards Sustainable Cities.
CHE
30
Recommendations on the environment Improve co-operation between Federal, Länder and municipal governments on joint urbanisation, housing, transportation and air quality plans. Phase in additional measures if emission trajectories diverge from targets. Raise and harmonise carbon prices across activities, along a predictable path supported by international co-operation.
31
NEED TO IMPROVE GOVERNMENT EFFECTIVENESS TO MANAGE SPENDING PRESSURES AND SUPPORT GROWTH
Population ageing will intensify Projected change in working age populations 2020=100, 15-64 year-olds, 2020-2050 115
115
Austria
Denmark
Germany
Netherlands
Sweden
Switzerland
110
110
105
105
100
100
95
95
90
90
85
85
80
80
2020
2025
2030
2035
2040
2045
2050
Source: United Nations (2018), World Population Database. 33
Ageing puts pressure on government spending Composition of total government spending In %, cyclically-adjusted, 1995 and 2014 Health, and sickness and disability (16.9)
Other primary expenditures (15.5) 14.8 Family and children, unemployment, and education (15.4) General government wages and intermediate consumption (17.9)
14.7
17.7
26.2 19.1
Old age and survivors (28.4)
7.5
Investment (5.9)
Source: Cournède, Fournier and Hoeller (2018), “Public finance structure and inclusive growth”, OECD Economic Policy Papers, No. 25.
34
There are risks to long-term public finance General government gross debt % of GDP, Maastricht definition, scenario analysis 140
140
Baseline
120
Ageing scenario
Accelerated growth scenario
120
100
100
80
80
60
60
40
40
20
20
0
2015
2020
2025
2030
2035
2040
2045
2050
2055
Source: Calculations based on OECD (2019), OECD Economic Outlook: Statistics and Projections (database).
2060
0
35
Recommendations to public sector Ensure the long-term sustainability of the pensions system, e.g. by linking retirement age to life expectancy. More closely align revenue raising and spending responsibilities of government levels. Seek economies of scale in municipal governance through shared services or consolidation of government. Implement high-quality independent government spending reviews to improve the quality and cost-efficiency of services.
36
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