Austrian Growth Not Fast Enough to Cut Unemployment, Wifo Says

Austria’s economy, reliant on exports to other European Union countries, isn’t growing fast enough to reduce the nation’s unemployment rate, the state-supported Wifo research institute said.

The country’s gross domestic product, the sum of all goods and services, will expand 1.7 percent both in 2014 and in 2015, the Vienna-based group said in a report today. Analysts predict expansions of 1.5 percent this year and 1.8 percent next year, according to the median of 16 estimates compiled by Bloomberg.

The Austrian economy is growing “too slowly to enable a reduction of unemployment,” Wifo said. It sees the jobless rate calculated using a European Union method rising to 5.2 percent this year and 5.3 percent in 2015 from 4.9 percent in 2013.

Austria, which has Europe’s lowest unemployment rate, relies on exports from companies including Voestalpine AG, the maker of specialty steel, and Andritz AG, the maker of hydro-power-turbines. Wifo kept its projected export growth for 2014 at 5.5 percent and at 6.5 percent for 2015.

“Many countries still haven’t overcome the financial crisis and the consolidation of public budgets damps the upward trend,” Wifo said, referring to Austrian exports.

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