Business Monitor International


Austria Business Forecast Report

Published 26 March 2014

  • 37 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Austria Business Forecast Report

Core Views:

  • The centre-left Social Democrats (SPÖ) and centre-right Austrian People's Party are set to once again form a 'grand coalition' government under the chancellorship of SPÖ leader Werner Faymann. This will ensure broad policy continuity, while soothing market fears surrounding the potential impact of the austerity measures that would have been likely if a right-wing coalition had been formed between the ÖVP, Freedom Party of Austria (FPÖ) and Team Stronach.

  • The Austrian economy is set to remain on a slow but steady real GDP growth trajectory over the course of 2014 and in to 2015, with our forecasts for an expansion of 1.5% in 2014 and 1.9% in 2015. This growth will primarily be supported by increasing private consumption, bolstered by an improvement in consumer confidence, low inflation and an uptick in domestic credit provision.

  • Nationalised lender Hypo Alpe Adria is set to require additional capital injections in 2014, with local media putting the estimates at EUR5.3bn. This is likely to hamper the finance ministry's commitment to eliminating the government budget deficit by 2016. We forecast a budget deficit equating to 2.2% of GDP in 2014, falling to 1.9% in 2015.

  • Austria's current account surplus is set to widen in 2014 to 2.9% of GDP on the back of increased exports to eurozone peers, notably Germany, as well as the recovering economies of Central and Eastern Europe, where import demand has been slack over the past few years.

Major Forecast Changes:

  • We have revised up our forecast for Austria's fiscal deficit in 2014 and 2015, from 1.9% and 1.4% of GDP to 2.2% and 1.9% respectively. This is as a result of the likely blow to government finances that will be dealt by state-owned bank Hypo Alpe Adria's request for additional capital injections in order to avoid breaching minimum capital requirements.

Key Risks To Outlook

  • If the People's Party follows through with its threat to walk away from coalition talks with the Social Democrats...

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
'Bad Bank' To Boost Nationalist Support
8
TABLE: Political Overview
8
Chapter 2: Economic Outlook
11
SWOT Analysis
11
BMI Economic Risk Ratings
11
Economic Activity
12
Hypo Alpe Adria Wind-Down Unlikely To Hurt Recovery
12
TABLE: ECONOMIC ACTIVITY
12
Regional Exchange Rate Policy
13
EUR: Monetary Policy Decoupling Will Weaken The Euro
13
TABLE: BMI Eurozone Currency Forecast
14
Chapter 4: Business Environment
17
SWOT Analysis
17
BMI Business Environment Risk Ratings
17
Telecommunications
19
Chapter 5: Key Sectors
19
TABLE: Fixed Line - Hist orical Data & Forecasts , 2011-2018
20
TABLE: Inte rnet - Hist orical Data & Forecasts , 2011-2018
20
TABLE: Mobile - Hist orical Data & Forecasts , 2011-2018
21
Chapter 6: BMI Global Assumptions
23
Global Outlook
23
Global Growth Optimism Turning To Disappointment
23
Table: Global Assumptions
23
Table : Devel oped States , Real GDP Growt H, %
24
Table : BMI VERSUS BLOO MBERG CON SENSUS REAL GDP GRO WTH FOR ECASTS, %
24
Table : Eme rgi ng Markets , Real GDP Growth , %
25

The Austria Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Austria and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Austria's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Austria's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Austria's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in Austria, including currency volatility, the commodity price boom and protectionist policies.

The Austria Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Austria economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Austria through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Austria Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Austria and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Austria, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Austria over the next 5-years?

BMI's Austria country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Austria Market - Political Strengths, Weaknesses, Opportunities and Threats facing Austria.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for Austria's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Austria's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for Austria, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of Austria's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

Key Sector Outlook

Which industry sectors in Austria will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Austria's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express