Recent Macroeconomic Developments and Medium-Term Issues

This chapter starts with an overview of the current macroeconomic situation and the Secretariat’s assessment of the short-term outlook. It then highlights a number of areas where structural reform is needed so as to cope with the longer-term challenges the Austrian economy is facing. For high economic performance to continue it is necessary to reduce barriers to labour force participation. This is a major issue addressed in this survey, involving removing incentives for early retirement and revisiting the incentives implied by family support policies. In the same vein, in some fields regulation can be improved so as to reduce the cost of labour and support higher labour demand. Austria’s growth performance would be supported by stepping up productivity. Various factors come into play that are important in this respect, such as raising the efficiency of the education system and fostering life-long learning. Further strengthening of product market competition will be helpful, and possibly necessary, for maintaining high productivity growth. A major part of this Survey is devoted to this issue. Moreover, improving economic performance and coping with the fiscal pressure arising from rapid population ageing requires reinforcing fiscal consolidation, linked to public sector reform. There appears to be considerable scope to further enhance the efficiency of the public sector, various aspects of which are considered in the fiscal part of the Survey. Finally, the Survey is dealing with further selected sustainability issues, namely climate change waste management and development aid to other countries...