Economic trends
The implementation of economic reforms by successive governments and strong growth in exports make Austria the preferred investment destination. The economy slowed down between 2001 and 2003. The country registered a GDP growth rate of 1.1% in 2003. It was the longest slow growth period that the country had known since second World War. The country’s economic situation has subsequently recovered due to the rapid development of exports which respond to the strong global economic growth, and in particular to that of Germany, its main trade partner. The growth rate increased both in 2006 and 2007, but decreased in 2008. The global financial crisis has heavily affected Austria, which made significant investments in Central and Eastern European countries. In effect, Austrian banks have invested euros 250 billion, which translates to 70% of the GDP, in the East. Austria has therefore created a domino effect from the fact that countries like Hungary were close to bankcruptcy. Thus the country has known the worst recession of its history in 2009. The situation should improve from 2010.
Main branches of industry
The agricultural sector contributes about 2% of the GDP and employs nearly 6% of the active population. Cattle farming and viticulture are the country's main agricultural activities. Organic agriculture is developing rapidly. It currently represents 10% of the agricultural production. Austria benefits from significant European Union subsidies as provided by the Common Agricultural Policy .
The main industrial sectors are the metalworking industry, electrochemistry and engineering, even though most of the companies in these sectors are relatively small on the international scale. The country has very little mineral resources like iron, lead and copper. The government started liberalizing the energy sector (namely electricity and natural gas), from 2003, thus paving the way for privatization.
The tertiary sector contributes around 70% of the GDP and employs two-thirds of the country's active population. Tourism is well developed. There are nearly 17 million tourists visiting Austria annually.
In 2008, the global crisis affected the Austrian industrial sector by reducing the demand on industrial products which were essentially for foreign markets.
International trade
The Austrian economy is heavily dependant on foreign trade which accounts for more than 95% of its GDP. Trade with European Union countries accounts for about 70% of the total trade. Austrian exports suffered significantly from the global crisis and the Austrian trade deficit reached its highest level since the beginning of the 2nd millenium at Euros 1.8 billion in 2008.
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