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- GDP (PPP):
- $361.4 billion
- 0.4% growth
- 0.4% 5-year compound annual growth
- $42,597 per capita
- Inflation (CPI):
- FDI Inflow:
Austria’s economic freedom score is 71.2, making its economy the 30th freest in the 2015 Index. Its score is 1.2 points worse than last year, with declines in freedom from corruption, labor freedom, and the management of government spending outweighing improvements in business freedom and monetary freedom. Austria is ranked 16th out of 43 countries in the Europe region, and its overall score is well above the regional and world averages.
Despite considerable strains over the past five years, Austria has maintained much of its economic stability and dynamism. Continued strong protection of the rule of law and the foundations of economic freedom is reflected in high scores in property rights and freedom from corruption, but these strengths are not matched by a commitment to limited government. Public spending has been expanding, generating great budgetary pressure.
Counterbalancing excessive government spending and weak fiscal freedom, the transparent and competitive business environment has promoted a thriving entrepreneurial private sector. The banking system has regained much of its characteristic efficiency and competitiveness after being roiled by the global economic crisis.
The coalition of the center-left Social Democratic Party and the center-right Austrian People’s Party, led by Social Democrat Chancellor Werner Faymann, lost seats in September 2013 but retained a governing majority. Eurosceptic parties made gains. Austria’s economy has been relatively resilient through the eurozone crisis, outperforming the economies of many other EU members, and unemployment is the lowest in the eurozone. Yet GDP growth has been modest, and government debt is growing. The government has gradually relinquished control of formerly nationalized oil, gas, steel, and engineering companies and has deregulated telecommunications and electricity. Austria has large service and industrial sectors and a small, highly developed agricultural sector.
Corruption is relatively rare, and cases are routinely reported in the media. Enforcement is improving but still somewhat haphazard, and legal proceedings in corruption cases are slow. The independent judiciary provides an effective means for protecting property and contractual rights of nationals and foreigners. The land registry, overhauled in 2012, is a reliable and accessible system for recording interests in property.
Austria’s top individual income tax rate is 50 percent, and its top corporate tax rate is 25 percent. Other taxes include a value-added tax and a tax on real estate transfers. The tax burden equals 43.2 percent of the economy. Government expenditures amount to over 50 percent of gross domestic product, and public debt has remained steady at 74 percent of domestic income.
Austria’s overall regulatory framework has been marked by transparency and efficiency, encouraging business innovation and productivity, but the absence of major regulatory reforms has eroded overall competitiveness. With no minimum wage, relatively flexible regulations facilitate employment growth. A high degree of state ownership and regulation remains in the electricity generation and transmission sectors.
EU members have a 1.0 percent average tariff rate. Although some non-tariff barriers exist, the EU is relatively open to external trade. Austria is open to most investment, but the regulatory system is complicated. There are no controls on currency transfers, access to foreign exchange, or repatriation of profits. The modern and competitive banking sector provides a wide range of financial services.