Austria‘s economy and related exchange traded fund (ETF) may lag a bit as the country tries to handle internal problems. But the overall economic outlook is improving.
Austria’s Central Bank chief estimates that the economy will contract by a less-than-expected 3.5% to 3.8% in 2009, reports Eva Komarek for Forbes. The country is struggling with a rising budget deficit and climbing unemployment rate, and a quick recovery doesn’t appear to be in the offing.
During the second quarter, exports dropped by 2.3%, as stated in Forbes. Austria’s economy is closely tied to that of Germany and more recently on the boost in exports to emerging European countries.
But there are a few points in favor of Austria’s economy:
- Resilient consumer demand could improve 2010 growth estimates
- Growth in the second quarter slowed another 0.5%, but it’s shrinking at a slower rate
- Austria’s largest bank has stated that its economic indicator, a gauge for six-month growth, increased to -0.9 from -1.8, the best result since the start of the indicator about 20 years ago, according to Forbes
- The prime factor for the improvement was the result of tax cuts and decline in consumer prices.
Still, there is a risk stemming from a rise in commodity prices, lagging impact on corporate balance sheets and unemployment rates.
- iShares MSCI Austria Investable Mkt Idx (NYSEArca: EWO): up 69.9% year-to-date
For more information on Austria, visit our Austria category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.