The Austrian National Bank has published its June 2026 macroeconomic forecast for Austria for 2026 to 2028, projecting weaker near-term activity and higher inflation after the war in the Near and Middle East pushed up energy prices, sustained geopolitical uncertainty and increasingly disrupted international supply chains. Real gross domestic product is expected to grow by 0.6 percent in 2026, before accelerating to 1.1 percent in 2027 and 1.2 percent in 2028. Harmonised Index of Consumer Prices inflation is forecast at 3.2 percent in 2026, then easing to 2.4 percent in 2027 and 2.1 percent in 2028. The forecast says the 2026 growth result is supported by a robust start to the year, while the labor market is expected to absorb the slowdown, with the AMS unemployment rate unchanged from the previous year at 7.4 percent. Inflation is expected to stay elevated because indirect and possible second-round effects limit the speed of disinflation even if energy prices fall quickly, with food and non-energy industrial goods inflation set to rise further in coming quarters and services inflation expected to moderate from a high level as wage growth slows. Compared with the Austrian National Bank's March 2026 forecast, the 2026 inflation projection was raised by 0.5 percentage points and the 2027 and 2028 projections by 0.1 percentage points each. On public finances, the forecast says approved consolidation measures will only partly offset a weak macroeconomic environment, higher interest payments, larger contributions to the European Union budget and demographic spending pressures. The net consolidation volume is estimated at about 0.6 percent of GDP in 2026 and 1.4 percent of GDP across 2027 and 2028, but the budget deficit is still seen improving only to about 4.1 percent of GDP in 2026 and 3.8 percent by 2028, with the debt ratio rising to 86.4 percent of GDP. Separate mild, adverse and severe scenarios highlight the uncertainty around commodity prices and second-round effects. In the severe scenario, Austria's economy would stagnate in 2027, inflation would rise above 5 percent and the budget deficit would widen to nearly 5 percent of GDP by 2028.
Austrian National Bank (OeNB)2026-06-12
Austrian National Bank forecasts Austria growth of 0.6 percent in 2026 with inflation at 3.2 percent after energy shock
The Austrian National Bank's June 2026 forecast for Austria sees GDP growth at 0.6 percent in 2026, rising to 1.1 percent in 2027 and 1.2 percent in 2028, while HVPI inflation is projected at 3.2 percent in 2026 before easing to 2.1 percent by 2028. It links the weaker outlook to the war in the Near and Middle East, higher energy prices and supply chain strains. The budget deficit is still expected to remain near 4 percent of GDP by 2028 despite planned consolidation measures.