While the Austria country-specific exchange traded fund has benefited from the easing measures and loose monetary policies, the Austrian economy is among the weakest in the Eurozone.
However, Austria’s economy has been sluggish, compared to other Eurozone states. Annual gross domestic product in Austria was at 0.1% last year, and in May, the European Commission projected that the country’s economy would only expand 0.8% this year, compared to the currency-bloc average of 1.5% and German outlook of 1.9%, reports Alexander Weber for Bloomberg.
The country is seeing unemployment rates trending upwards to 5.7% in April, which has the Austrian central bank “massively concerned.”
The central bank argued that Austria is slowly losing business with Germany as neighbors like Slovakia, Hungary and the Czech Republic gain greater market share the Eurozone care manufacturing industry. The country’s share of German imports dipped to 4.3% last year from 4.6% in 2009, and since exports to Germany amount to a third of total sales abroad, the small dip means a lot.
“We estimate that potential demand from Austria’s trading partners rose by 6.5% in 2013–14, but export growth over the same period was only 1.5%,” according to Ernst & Young Global Limited, FriedlNews reports. “This weakness is due to the fact that many of Austria’s exporters are specialized in investment goods, and that 73% of exports go to the EU, of which 55% go to the Eurozone. Against the background of persistent uncertainties about the growth outlook in Europe, investment activity in the continent has remained subdued and has resulted in weak demand for Austrian investment goods.”
The Eurozone is currently enjoying a boost to growth from lower oil prices and the European Central Bank’s recently announced quantitative easing program. However, the boost will only help Austria’s economy to a lesser extent