Austria Overview

The economic activity in Austria is going through a moderate growth, mainly due to an economic slowdown in Germany, Austria's favourite trade partner. The country's GDP growth rate was 0.7% during 2003, 2.2% in 2004 and 1.9% in 2005. For 2006, it is estimated at 2.2%, especially thanks to an improvement in the German and Swiss situation. Austria is one of the most developed countries in Europe and invests more and more in Central and Western Europe. Austria is the 1st investor in Slovenia and Croatia and the 3rd most important investor in Slovakia, Hungary and Czech Republic. Inflation is low (+2.5% in 2005) and the unemployment rate is stable (4.5% in 2005).

The agricultural sector constitutes 2.35% of the country's GDP and employs 6% of its active population. Cattle breeding and wine growing are the main agricultural activities. Austria benefits from large communitarian agricultural subsidies and is developing organic agriculture (10% of the Austrian agriculture production). Austria holds some mineral resources like iron, lead or copper, but the mining sector has a marginal importance in economics. This phenomenon can be explained by the lack of profitability for raw materials extraction, which consequently have to be imported. Furthermore, in 2003, the Austrian government started a liberalisation policy concerning electricity and natural gas which paved the way for numerous privatisations. Austrian industry relies on metallurgical, electro-chemical and engineering sectors. The service industry employs two-thirds of the country's active population. Tourism is very developed: 17 million tourists annually visit Austria.

The Austrian economy largely depends on its foreign trade which represents more than half of its GDP. The top three import partners of Austria are Germany, Italy and the U.S.A. The top three export partners are Germany, Italy and France. The country mainly imports machines and vehicles (which account 40.4% of the importations and 44.9% of the exportations), consumer goods and chemical products.