FX.co ★ Austria Economy Grows In Q1; April Inflation Lowest Since Sept 2021

For the first time in four quarters, Austria's economy witnessed growth during the three months leading to January. This improvement was attributed to an increase in household consumption which helped counterbalance the investment decline, as disclosed in preliminary data by the Austrian Institute of Economic Research, WIFO, on Tuesday.

The Gross Domestic Product (GDP) showed a marginal rise of 0.2 percent in comparison to the previous quarter, marking the first escalation since the first quarter of 2023 when the economy modestly grew by 0.1 percent.

In the fourth quarter of 2023, the Austrian economy reached a standstill after a decrease of 0.3 percent and 1.3 percent in the third and second quarters respectively. The year-on-year economic output fell by 1.3 percent following a decline of 1.4 percent over the last three months.

This period saw private consumption bouncing back with growth of 1.3 percent, while gross fixed capital formation contracted by 2.7 percent. Despite exports reducing by 0.3 percent and imports falling 1.5 percent, sectors associated with consumer-related services like trade, transportation, accommodation, and food service registered an increase in output. Meanwhile, industries and the construction sector reported a downward trend in their output. The detailed data for the first quarter GDP will be released by Statistics Austria on June 3.

In other developments, preliminary statistics from Statistics Austria revealed a dip in consumer price inflation to 3.5 percent in April, the lowest since September 2021. According to Director General of Statistics Austria, Tobias Thomas, the drop in gas prices significantly below 2020 levels coupled with the lowering effect of package tour prices, a strong price driver over the last year, contributed to the declining inflation. He added, "Price increases in restaurants remain above average and fuel prices continue to climb."

The inflation based on the EU HICP measure declined to 3.4 percent from 4.1 percent. The Consumer Price Index (CPI) observed a slight increase of 0.1 percent month-on-month, while the HICP saw a rise of 0.2 percent during the same period.