Uncertainty clouds growth prospects

Current economic forecasts see Austria on a fairly decent growth path. After an average of 1.8 percent real economic growth in the last 5 years, an average of 1.6 percent growth is expected for the next 5 years. "The current growth prospects are not set in stone. Companies' expectations are mixed with a great deal of uncertainty about future developments at home and abroad, which is bad for investment," says Tobias Thomas, Director of the economic research institute EcoAustria, on Ö1 Mittagsjournal today.

Uncertainty from abroad is being caused in particular by the unclear outcome of Brexit and increasing trade conflicts worldwide. "The introduction of punitive tariffs and the termination of trade agreements by US President Donald Trump are clouding the growth prospects of the global economy," says Thomas. And with regard to the domestic market, investors and companies cannot currently be sure what will happen with the economic policy framework after September 29. "To increase competitiveness, the future German government should tackle the tax rate, as the burdens on labor and companies are too high in international comparison. However, a one-off reduction in the tax ratio is not enough: without further structural reforms, it will automatically rise again. These include the abolition of cold progression and the demographically sound design of social security systems," said Thomas in an interview with Ö1.