Overall, the Austrian economy is maintaining its position among the top performing European economies. Austria’s capacity to take advantage of positive external developments contributed to this outcome. Nevertheless important challenges remain. First, recurrent use of one-off consolidation measures with a relatively high level of public sector debt-to-GDP ratio suggest that there is the need to reform budgeting procedures, including fiscal federal relations – the in-depth structural theme of this Economic Survey – in order to make the government sector more efficient and deliver high quality public services at a lower cost to society. Second, relatively low labour force participation rates of older workers will increase the burden of ageing on the Austrian economy. Hence, further reforms are needed to boost labour force participation and employment while at the same time encouraging productivity growth, notably by fostering competition and providing a better environment for innovation activities...