Austrian National Bank lowers economic growth expectations

Special Report:Global Financial Crisis

VIENNA, Dec. 9 (Chinese media) -- Austrian National Bank lowers its economic growth expectations for Austria by 2 percent for 2009 and1.6 percent for 2010 respectively in a report released on Tuesday.

According to the forecast, the GDP (gross domestic product) growth rate of Austria in 2009 will be minus 0.3 percent, while only hit 0.9 percent in 2010.

President of Austrian National Bank Ewald Nowotny admitted in the forecast that "due to the global weakening economy, Austria's economic growth situation is very serious." Even Eastern European countries, which kept high growth before as well as the newly developed Asian and Latin American countries also have "obviously shrinking" economy.

Nowotny also pointed out that "not only the decreasing export, but also the lowered domestic demand growth" pulled Austrian economic growth slower.

According to the forecast, "foreign export, which used to be the motor for Austrian economic growth, is expected to have a growth of minus 2.7 percent in 2009, while domestic private consumption growth will decrease from 1.2 percent to 0.5 percent and public consumption growth will dive from 1.9 percent to only 1percent."

Under this background, Austrian employment growth is also expected to fall in 2009, with a rising unemployment rate from the current 3 percent to 4.2 percent in 2009 and 4.8 percent in 2010.

With the impact of the unfavorable economic situation, the budget deficit for 2009 and 2010 will increase from the current 0.7 percent of GDP to 1.9 percent in 2009 and 2.5 percent in 2010.