Austrian economy

The Austrian economy is defined as a social market economy, with private and public enterprises. Core activities have been nationalized after the end of World War II. Austria is one of the most prosperous and developed countries in Europe. Thus, Austria has a well-developed economy thanks to the great structure of its market, a structure reflected in the high standard of living of its inhabitants.

During the 1980s, much of the industry was nationalized, although privatization has reduced the size of the economy to a level comparable to other European economies. Labor movements are particularly strong in Austria and have a great influence on labor policy.

Since it became a member of the European Union in 1995, Austria has pushed through deep structural reforms, such as the liberalization of telecommunications, energy and tobacco, the privatization of banks, the steel industry and oil. It was followed by mergers of national and foreign companies, in sectors such as food, commerce, construction, banking, steel, oil, tobacco and telecommunications.

Gross Domestic Product and economic growth

Austria is one of the richest countries in the world, ranking third in countries by income per capita.

In 2011 the countries of the European Union entered a recession. Austrian growth declined ( inclination) of 0.9% in 2012, related to the global crisis. In 2012 it had one of the lowest unemployment rates in all of Europe, in the order of 4.3%, thanks to its work policy.

Austria launched a business diversification program, seeking new partners and developing products in research, development, and in the green and digital economies. Another priority for the country is the education system and the fight against tax evasion.

Economic dependence on Germany

Historically, Austria has maintained a strong economic dependence on Germany - its main partner - making it highly vulnerable to changes in the German economy. In 2001, slow growth in several world economies, including Germany, affected Austria, reducing its GDP growth to 1.2% in 2001. Since Austria joined the European Union, strong ties have been created with the other economies of the European Union, reducing its economic dependence on Germany. In addition, the European Union's partners have fostered an influx of foreign investors attracted by Austria's access to the European market. Therefore, growth estimates in 2005 (up to 2%) are much more favorable than in the exhausted German economy.

Industries

Austria is an industrially developed country with a significant service component. Services represent 67.5% of the economy, however, the remaining 30.3% includes important industrial sectors such as machinery manufacturing, the steel sector, and the chemical and automotive industries.

Austria is known internationally for the sophistication of the electronics industry, especially for its custom-made electronic products.

Although some industries, such as iron and steel and chemical plants, are large companies employing thousands of people, companies in Austria are relatively small on an international scale. In general, small and medium-sized companies predominate. Only 167 companies have more than 1,000 employees.

The Austrian industrialized sector is also developing strongly in the arms, machinery and textiles sectors. Regarding the service sector, tourism, finance and telecommunications are the largest generators of capital.

Livestock

Austrian farms, like those of the other mountainous countries in Europe, are small, so production is relatively expensive. Since Austria's entry into the European Union in 1995, the agricultural sector has undergone substantial reform thanks to the Common Agricultural Policy of the European Union (CAP). Although Austrian farmers provide approximately 80% of the national food requirements, the agricultural contribution to the gross national product has decreased to less than 3%.

The livestock is dedicated to raising cattle, pigs and goats.

Services

The service sector is the most important for Austria, as it makes up a large part of the gross domestic product. Thus, Vienna has increased in size, partly thanks to its strategic commercial position, which has established it as the gateway to Eastern Europe. Austria's main corporations are made up of law firms and banks from the rest of the European Union.

Tourism

Austria has been a frequent route for travelers since time immemorial. With its central European location, shared borders with 8 countries (Germany, the Czech Republic, Slovakia, Slovenia, Hungary, Italy, Switzerland and Liechtenstein), Austria has a long tradition of welcoming tourists. Being a small country (8.2 million inhabitants), Austria receives about 19 million foreign visitors each year, which places it among the 10 most popular destinations in the world.

The flow of tourists has been interrupted throughout history by the two world wars and then by the economic crisis of the 1920s. Since the mid-1970s, the tourism industry has had to face new challenges such as excessive protectionism and political-social changes.

Direct income from the tourism sector generated 9.8% of GDP.

Tourism in Austria presents itself as a combination of culture, history, nature, sports and business. Austria has become a meeting place for international politics and conventions.

The Alps and winter tourism

Austria is a paradise for winter sports fans: more than 800 resorts offer 22,000 km of ski slopes and 16,000 km of cross-country trails. Austria has hosted the Winter Olympic Games twice, making the city of Innsbruck the center of the white sport.

Winter tourism forms a very important part of the Austrian economy. The large influx of German visitors has made this sector largely dependent on the German economy, although changes have recently been taking place that try to prevent tourism from becoming dependent on the German economy. These changes translate into the creation of ski resorts such as Arlberg or Kitzbühel, which are increasingly frequented by Eastern Europeans, Russians and Americans.

Foreign trade

Imports

The goods with the greatest weight in Austrian imports for the period 2010-until April 2015 are presented below. The figures expressed are in US dollars, FOB value.

Imports from Austria for the period 2010-up to June 2015 expressed in USD value FOB. Source

Exports

Austria's main trading partners are presented below for the period 2010-April 2015. Most of its importers are in Europe except for Russia and the United States. The figures expressed are in US dollars FOB value.

Exports from Austria from 2010 to June 2015 expressed in USD value FOB. Source

Energy

Austria has large reserves of raw materials and energy, making it the eighth largest electricity exporter in the world.

Austria stands out for having the highest percentage of renewable energy sources in the EU over total consumption and has no nuclear power plants. Its reputation for energy efficiency is reflected in its per capita consumption, which in the case of electricity is below that of the OECD or the US. The level of energy intensity of the Austrian economy is the second lowest in the EU and behind Denmark.

Environment

The beauty of its nature, rivers and lakes, clean air and well-kept terrain are characteristic features of the Austrian landscape. Industrial and economic advances have been carried out with a concern for the environment.

Policies oriented towards environmental protection have allowed economic activities, such as agriculture, to coexist with an environment appropriate to the international framework. To reduce CO2 emissions, Austria has opted for energy efficiency and renewable energy (sun, wind, biomass) and the optimization of heating systems and use of heat.

Employment and conditions

In Austria there are about 3.9 million people employed and about 240,000 unemployed. The unemployment rate is one of the lowest in Europe, 7.65

In Austria you work 40 hours a week, although in some parts you negotiate less. The minimum salary is €1,100/month since 2009. Salaries are paid fourteen times a year, and two special payments, usually on June 1st and December 1st. Vacations are 5 paid weeks in the year.

Every actively employed person is subject to compulsory insurance including unemployment, disability, retirement and survivor's provision. The unemployment right is valid for people who worked for at least one year. Unemployment benefits range from 50 to 70 percent of the net paid and are limited to 7 months. After that period, the unemployed can apply for a series of other support programs depending on their needs.

The retirement age is 65 for men and 60 for women. However, only 10% of men and 50% of women work up to that age, since the rest prefer to retire early.

The pension is generally calculated based on the income level of the last ten years and the total period of contributions. Due to demographic changes and retirement practices, the ratio between the workforce and retirees is deteriorating and by 2020 it may reach 1:1. Experts acknowledge that it is inevitable to reform the pension system and reduce social security benefits that were introduced under fortuitous economic and demographic conditions in the 1960s and 1970s.