Austria’s Exports to Eastern Europe: Facts and Forecasts Likely Impact of Slowing Exports on Growth in Austria

In 2008, 72.1% of all Austrian goods exports went to the EU-27; thereof, 17.6% went to the Eastern European states that joined the EU in 2004 and 2007, and 24.6% to Eastern Europe at large. While export demand for Austrian goods has declined markedly since the end of 2008, in the context of the international economic crisis, exports to the “new” Member States declined somewhat less than those going to the “old EU.” This article offers a brief overview of the extent and development of Austrian exports to Eastern Europe, the latest growth forecasts for these countries, and their implications for Austria’s growth forecast. The latest forecasts for Eastern Europe, while pessimistic and mixed in line with the global trend, indicate that growth rates – especially in the “new” EU Member States – are still higher (or that recessions are still weaker) on average than in Western Europe. Simulations with the OeNB’s macro model show that the growth setbacks anticipated for Eastern Europe by the latest forecasts are likely to push the decline in Austria’s real GDP growth another 0.7 percentage points below the rate implied by the OeNB’s December 2008 forecast.