New Market Report: Austria Business Forecast Report Q4 2014

CORE VIEWS

* The Austrian economy will remain in the doldrums in 2014 and 2015 as weak demand, both externally and internally suppresses private consumption and fixed investment levels. The ongoing tensions between Russia and the West will also deter firms from investing in fixed capital until the geopolitical landscape becomes clearer.
* The more vocal opposition from the Austrian government to Russia's actions in eastern Ukraine will win support from other EU member states, but will likely hinder the chances of Gazprom's proposed South Stream natural gas pipeline, which is set to terminate in Austria, being constructed. This could lead to trouble for Austrian banks such as Raiffeisen International, which have a large presence in the Russian market, and could end up as the subject of retaliatory sanctions.
* The change in leadership of the junior coalition partner, the centre-right Austrian People's Party (OVP), will not fundamentally alter the functioning of the 'grand coalition' administration. In fact, given that new OVP leader Reinhold Mitterlehner holds a view on tax cuts much more in line with Chancellor Werner Faymann's senior coalition partner Social Democrats (who support tax cuts in order to boost growth) we could see smoother progress on legislation between the two parties. Mitterlehner's stance is in contrast to outgoing OVP head and fiscal hawk Michael Spindelegger who only supported tax cuts if it did not result in a wider budget deficit.

Full Report Details at
- http://www.fastmr.com/prod/887952_austria_business_forecast_report_q4_2014.aspx?afid=301

MAJOR FORECAST CHANGES

* We have revised down our forecast for real GDP growth in 2014 and 2015, from 1.5% and 1.9%, to 0.9% and 1.4% respectively. External demand from the rest of the eurozone will remain weak in the coming quarters, reducing net exports' contribution to headline growth compared to previous years. Meanwhile, we believe there will be a lack of investment as firms defer from spending on fixed capital while the Ukraine crisis continues to rage, and capacity utilisation remains below the...

The Austria Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Austria and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Austria's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

* Forecast the pace and stability of Austria's economic and industry growth through end-2018.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.

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