One of the 12 richest countries in the world in terms of
Austria (Republik Oesterreich ) has a well-developed social
market economy, and a high standard of living. Austria
is closely tied to other EU economies, especially Germany’s. Its
economy features a large service sector, a sound industrial sector,
and a small, but highly developed agricultural sector.
Following several years of solid foreign
demand for Austrian
exports and record employment growth, the international financial
crisis and global economic downturn in 2008 led to a recession
that persisted until the third quarter of 2009. Austrian GDP contracted
3.6 percent in 2009 and it will probably see positive growth
of nearly 1 percent in 2010.
The Austrian economy has benefited
greatly in the past from
strong commercial relations, especially in the banking and insurance
sectors, with central, eastern, and southeastern Europe, but
these sectors have been vulnerable to recent international financial
Some of Austria’s largest banks have required government support - including in some instances, nationalisation - to prevent insolvency and possible regional contagion. Even after the global economic outlook improves, Austria will need to continue restructuring, emphasising knowledge-based sectors of the economy, and encouraging greater labour flexibility and greater labour participation to offset its aging population and exceedingly low fertility rate.
Until the 1980s, many of Austria’s largest industry firms were nationalised; in recent years, however, privatisation
state holdings to a level comparable to other European
Next to a highly developed industry, international tourism is the most
important part of the national economy.
Germany has historically been the main trading partner of Austria, making it vulnerable to rapid changes in the German economy. However, since Austria became a member state of the European Union it has gained closer ties to other European Union economies, reducing its economic dependence on Germany. In addition, membership in the EU has drawn an influx of foreign investors attracted by Austria’s access to the single European market and proximity to the aspiring economies of the European Union. Growth in GDP accelerated in recent years and reached 3.3 percent in 2006.
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