2013-10-15 04:08:31 - Fast Market Research recommends "Austria Business Forecast Report Q4 2013" from Business Monitor International, now available
The Austrian government is set to continue its policy of attempting to eliminate the federal budget deficit by 2016 regardless of which party emerges victorious from the September 29 general election.
We forecast the budget deficit to fall to 2.1% of GDP in 2013 and 1.9% in 2014, from 2.5% in 2012. An increase in tax revenues is set to be the primary driver behind this reduction, as well as an austerity drive in the country's provinces to eliminate their respective deficits.
Real GDP growth its set to increase from its 2012 level of 0.8% to 0.7% in 2013, rising further to 1.5% in 2014. The primary driver behind this growth is set to be net exports, bolstered by a robust pharmaceuticals
sector, as well as the manufacturing sector's important role in the supply chain for German autos makers.
The winding down of nationalised lender Hypo Alpe Adria is set to be completed by end-2013, after the European Union's anti-trust authorities approved the government's plans in September. While the stricken bank may require additional state aid to enable the sale of its Balkan unit and the winding down of its Italian unit, the move bodes well for the government's medium-to long-term fiscal position, as well as the health of the banking system.
Full Report Details at
- www.fastmr.com/prod/694750_austria_business_forecast_report_q4_2 ..
Key Risks To Outlook
In spite of the progress made towards the winding down of Hypo Alpe Adria, the Austrian banking sector remains on unstable footing. The sector remains highly exposed to economies in Central and Eastern Europe (CEE) and South Eastern Europe (SEE), as well as Italy.
If there is not a more concerted effort on the part of the banking sector to reduce its exposure to high-risk markets such as Hungary and Ukraine it could lead to a sharp uptick in non-performing loans (NPL). Although the CEE economies are set to fare better in H213 and 2014, the policy environment remains uncertain and NPLs are still high compared to domestic Austrian levels. Deterioration in the health of any of the large Austrian banks could severely impact private consumption, as credit extension dries up, posing a substantial risk to our stable growth outlook.
Report Table of Contents:
Key Risk To Outlook
Chapter 1 Political Outlook
BMI Political Risk Ratings
Policy Continuity After Election
- Austria's federal election, due to be held on September 29, is set to return another 'grand coalition' between the centre-left Social Democrats and centre-right Austrian People's Party. Which party will lead the coalition remains too lose to call, but in either eventuality we do not anticipate a substantial shift in policy, with the focus set to remain on deficit reduction and job creation.
TABLE: POLITICAL OVERVIEW
Regional Political Outlook
Franco-German Threat To Eurozone Survival
Chapter 2: Economic Outlook
BMI Economic Risk Ratings
- Austria's economy is set to perform better in H213 than the first half of the year, with our forecast for real GDP growth of 0.7% in 2013, rising to 1.5% in 2014. Private consumption and fixed investment is set to remain subdued in light of an uncertain eurozone growth picture, but net exports should boost growth given our expectation for increased import demand from Germany and Central Europe.
TABLE: ECONOMIC ACTIVITY
Regional Economic Activity
Beware Of Volatility Blowback
- Despite efforts by the European Central Bank to quash volatility in the eurozone by eradicating left tail risk (there is now surprisingly little talk of a euro breakup) we warn of the possibility of a major blowback in 2014. We keep coming back to same fundamental constraint facing the euro area: a lack of serious structural reform of the currency union. Progress on a combined banking, fiscal and political union, as well as efforts to bolster internal and external competitiveness, has been minimal and suggests that the ECBs anaesthetic uld abruptly wear off.
Chapter 3: Business Environment
BMI Business Environment Risk Ratings
Chapter 4: Key Sectors
TABLE: AUSTRIA - STEEL PRODUCTION & CONSUMPTION ('000 TONNES, UNLESS STATED OTHERWISE)
TABLE: AUSTRIA - STEEL INDUSTRY HISTORICAL DATA ('000 TONNES, UNLESS STATED)
Other Key Sectors
TABLE: PHARMA SECTOR KEY INDICATORS
TABLE: TELECOMS SECTOR KEY INDICATORS
TABLE: INFRASTRUCTURE SECTOR KEY INDICATORS
TABLE: AUTOS SECTOR KEY INDICATORS
Chapter 5: BMI Global Assumptions
Lowering EM Growth Forecasts
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
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