June 15, 2018 / 8:33 AM / 5 months ago

Austrian growth to stay above 3 pct this year, central bank says

VIENNA, June 15 (Reuters) - Austrian economic growth in 2018 will match last year’s level above 3 percent, which was the highest in a decade, as a period of strong recovery is lasting longer than originally expected, the country’s central bank said on Friday.

In its half-yearly economic forecast, the Austrian National Bank revised its gross domestic product (GDP) prediction for 2018 up to 3.1 percent from 2.8 percent in its last forecast in December. That would bring this year level with last year’s growth rate.

“The Austrian economy is currently in the second year of a high-growth period in which growth is driven by all demand components,” the central bank said in a statement.

Export growth in the trade-dependent country will already slow this year, however, and the overall growth rate will soon follow, it said. The central bank predicted GDP growth of just 2.1 percent next year, although that was revised up from 1.9 percent in its previous forecast.

“The forecast is based on the assumption that export growth will weaken slightly against the backdrop of a moderation in the global growth cycle,” it said.

Austrian inflation according to the harmonised index of consumer prices (HICP) has remained above 2 percent despite the European Central Bank’s target being just below that threshold.

The Austrian National Bank said that was not about to change - it expects HICP inflation to stay at 2.2 percent this year, easing to 2.0 percent next year and 1.9 percent in 2020.

“This decline is largely due to the development in energy prices. The energy component of the HICP will decline because of the falling oil price,” it said. (Reporting by Francois Murphy)

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