Austria Economy

Economic situation

As a country starting with letter A according to Countryaah, Austria is one of the highly developed industrial countries. It is characterized by a stable economy, low unemployment and a lot of transit traffic. The distribution of income depends heavily on educational attainment, but government intervention has significantly reduced the inequalities of income.

Measured in terms of gross domestic product (GDP), the country has an economic output of € 398.52 billion (2019) and is one of the countries worldwide with a very high income and standard of living. In 2018, 4.89 million people were employed, with almost 70% of all women between the ages of 15 and 64 in employment. Unemployment is (2019) between 4 and 5% and thus at a low level, while that of young people is relatively high.

The service sector in particular has seen strong growth in recent years. It accounts for (2019) 70% of economic output. The tourism industry in particular plays a major role here. The main exports are mechanical engineering products, chemical products, motor vehicles and motor vehicle parts, as well as food and beverages. More than two thirds of them go to the EU, mainly to Germany and Italy. The main imports are raw materials, chemical products, machines, automobiles, petroleumand petroleum products as well as food.

Due to its geographical location, Austria is also an important transit country. A particularly large amount of traffic flows over the Brenner and Tauern routes. Kilometers of train and motorway tunnels run through the Alps. The entire length of the Danube is navigable in Austria. The largest Austrian Danube ports are in Linz, Vienna, Krems and Enns. The largest airport in the country is located in Vienna. The share of renewable energies in electricity generation is very high in Austria at 75%. More than 60% comes from hydropower plants.

Origin of economic output

On the one hand, Austrians work in relatively sparsely populated regions in the Alpine region. On the other hand, the economic output of the industry arises due to infrastructural advantages in larger cities and their surroundings. A quarter of Austria’s economic output (2019) is provided by the employed in the workplaces in the federal state of Vienna; together with Upper and Lower Austria, 58% of economic output come together here. Another 22% are in Tyrol and Styria.

Agriculture and forestry sector: The agricultural area is almost a third of the total area of ​​the Alpine republic (2019). 4% of all employees in the state work on predominantly arable land, pastures and meadows and a relatively small wine-growing area in the Wachau, generating a little more than 1% of GDP.

Industry and trade sector: This sector generates a quarter of Austria’s GDP (2019) with € 102.63 billion. 21.6% of all employees in Austria are employed for this; two thirds of them are engaged in the manufacture of goods in industry.

Service sector: This area is the largest sector in terms of economic output. It thus makes a significant contribution to the high standard of living of the citizens. The finance and insurance sector in particular has a large share of value added at 12.5% ​​of GDP. Accommodation and catering are strongly geared towards tourism from other countries, especially Germany, and account for 6.5% of GDP and all employees in the Alpine republic (2018).

Use of economic output

In Austria (2019), 71.5% of GDP is used by private and public households for consumption purposes. A quarter of the national economy’s annual added value is invested. Private households use between 24 and 30% of their funds for housing and energy, depending on their size. 14% of consumption is devoted to transport services. Only then do the expenses for nutrition as well as for leisure, sport and hobbies follow. In addition, 4% is spent on health and 1% on education.

In Austria, the public sector accesses economic resources at the federal, state and local levels through taxation and levy collection. This enables services to be provided in different areas of responsibility, such as education, health, social security and internal and external security. In Austria (2019), 48.2% of GDP is used for the expenditure of all public budgets. A little less than five years ago but a little more than ten (see government quota).

Distribution of economic output

In Austria, as in most highly developed industrial countries, a good two thirds of the income generated and used in the economic process is distributed among the employees. A quarter is accounted for by entrepreneurs as well as the self-employed and freelancers. The workforce has been able to increase its share slightly to 69% (2019) through successful collective bargaining in recent years. The proportion of companies and assets fell slightly to 26.3%.

The distribution of income among private households is very different in Austria. Recipients of income from self-employed and self-employed work (2018) predominantly belong to the middle class. In particular, the level of education determines the level of income. Almost 40% of the graduates who have completed at most compulsory school belong to the lowest income quarter, 15% even belong to the lowest income tenth. Graduates with a Matura mostly belong to the upper half of the income. The top 1% of households in the Alpine republic (2017) can collect a moderate 9% of all incomes – compared to 12% in Germany, 13% in Great Britain and even 20% in the USA. In Austria the Gini coefficient is for income distribution (2016) before public intervention 0.5. By collecting taxes and transferring social benefits, the state ensures that the coefficient is reduced by almost half to 0.28, thereby significantly reducing the unequal distribution of income.

According to this, 7.7% of people between the ages of 18 and 64 in Austria (2019) still belong to the “working poor”. As expected, this mainly includes single-parent households, non-EU / EFTA foreigners, recipients of private incomes and social benefits such as people with no more than compulsory schooling, but also the self-employed.

Overall, around 1.5 million people in Austria (2017) are at risk of poverty and exclusion. This corresponds to a population share of 18%. After all, 14% of wage earners earn less than 2/3 of the median gross wage. In the past ten years only slight improvements can be seen, which are mainly due to the sustained good economic situation and the brightening of the labor market. The long-term unemployed benefited the least. Their number has tripled from 54,000 (2008) to 160,000 (2017).

Austria Economy