In 1987 the government had decided that the Austrian economy
needed certain structural reforms if it were to remain
competitive in Europe and in the world. The new coalition
government, formed by the Socialist Party of Austria
(Sozialistische Partei Österreichs--SPÖ) and the People's Party
of Austria (Österreichische Volkspartei--ÖVP), was spurred to
take action as a result of two significant factors: the passage
by the EC of the Single European Act, designed to lead to a much
closer economic union of EC member states; and Austria's poor
growth rate, which lagged behind that of the European members of
the Organisation for Economic Co-operation and Development
(OECD--see Glossary).
Those reforms were aimed principally at fiscal
and financial stability for the government sector and at greater
efficiency for the private sector. The government later
reinforced these measures in order to meet the requirements for
establishing the European Economic Area
(EEA--see Glossary).
The measures included steps aimed at reducing the fiscal
deficit as a share of GDP. The budget deficit began to be brought
down to the target level of 2.5 percent of GDP, although somewhat
more slowly than the planners had hoped. The government also
announced a comprehensive restructuring of the state-owned
Austrian Industries, the giant national company that had taken
over most of the heavy industry left to Austria by the retreat of
the Germans after World War II.
The restructuring efforts moved apace for several years after
the government decision of 1987. The single most important area
from the standpoint of the government was the reduction of the
ever-growing federal share of the economy. A series of measures
were implemented to cut the federal share of GDP from 23 to 21
percent and to reduce the provincial and municipal governments'
share of GPD from 17.4 to 16.8 percent between 1986 and 1990.
One of the principal objects of reducing the size of the
federal government was to control the interest burden of the
government sector, a burden that had risen rapidly during the
early 1980s. Another was to reduce the government sector's gross
indebtedness. The first of these measures had little effect
because the interest burden had risen from 18.0 percent of total
government tax revenues to 23.5 percent by 1991. The second
measure was more successful because the ratio of the new deficit
to GDP stabilized at about 2.5 percent, but the government
sector's gross indebtedness nonetheless continued to rise,
reaching the level of 56.5 percent of GDP by 1991. For a
government that contemplated joining the European Community
(EC-- see Glossary)
and the European Monetary Union
(EMU--see Glossary),
that level was dangerously high. It was almost as high
as the limit of 60 percent that the EC had set in December 1991
as the maximum level acceptable for states that wished to join
the EMU.
One reason the government had difficulty managing its own
budget was that more than 85 percent of the central government
budget expenditures were committed to nondiscretionary items such
as civil service salaries and social security benefits. The
government consistently found itself severely constrained in
trying to reduce or even to control the remaining discretionary
elements.
As for Austrian Industries, some reduction in personnel was
accomplished as part of the reform, but the slump in global steel
and chemical markets left considerable uncertainty as to whether
more restructuring might not be needed. Privatization also made
some headway with the sale of the mint to the Nationalbank in
1989 and a reduction in the government's share in Austrian
Airlines and several major financial institutions.
While efforts to amend and strengthen the cartel law to
increase domestic competition moved slowly at first, certain
steps were taken. Among them was the decision to adapt the public
monopoly regulation to the standards of the EEA. In November
1991, the last foreign-exchange controls were lifted, thus
opening the economy further to foreign competition in financial
services and liberalizing cross-border financial transactions.
The new Stock Exchange Act of 1989 was designed to increase
openness and flexibility.
The most difficult objective of structural reform was
reducing government subsidies. Some success was achieved between
1987 and 1990, when federal subsidies as a percentage of GDP fell
from 2.2 percent to 1.9 percent and when general government
subsidies dropped from 2.9 percent to 2.4 percent. But questions
arose as to whether progress of this kind could be continued.
Nonetheless, the government was able to enact a major reform
in the tax system in 1989. The reform entailed gross tax
reductions of about S45 billion. It lowered personal income tax
schedules, reducing the top rate from 62 to 50 percent and the
lower rate from 21 to 10 percent, while widening the tax base.
The reform also abolished the progressive corporate tax schedule
and adopted the earlier 30 percent bottom rate as the standard
corporate tax rate (compared with the earlier top rate of 55
percent). The tax reform raised incentives and spurred growth.
European integration played a central role in the drive
toward structural reform of the Austrian economy. The EEA
treaty's provisions on regulation and liberalization forced farreaching changes in the form of increased economic opportunities
and competition. It also forced the removal of many barriers that
had sheltered important sectors from international competition,
especially nontariff barriers.
Importantly, unit labor costs--which had almost doubled
during the 1970s--held steady throughout much of the 1980s,
peaking in 1987 when the new reforms were announced. By the end
of the 1980s, lower labor costs had improved the competitive
position of Austrian exporters to a level they had not enjoyed
for some time. Wages and salaries per unit of output, which had
risen steadily from a scale of 100.0 in 1970 to a scale of 205.9
by 1982, rose only gradually to 216.3 in 1987 and then declined
to 208.2 in 1990.
Austria's economic environment changed dramatically during
the late 1980s and early 1990s with the opening of the Iron
Curtain. Many of the trade agreements that Austria had made with
formerly communist states behind the Iron Curtain suddenly became
null and void, opening new opportunities but also requiring
Austrian resources to help invest in those states as well as to
offer credit in order to finance exports. In addition, Austria
lost some export markets because the German economy registered a
sharp decline in the early 1990s as the cost of German
unification had to be financed largely by debt and as the German
central bank (the Bundesbank) began raising interest rates to
reduce the risk of inflation.
The loss of export markets affected Austria adversely, as did
the spillover effect of high German interest rates on Austria's
own interest rates. GDP growth fell from 4.6 percent in 1990 to a
level of only 2.0 percent in 1992 and was expected to decline
further. Unemployment rose, especially among foreign workers.
Although it appears likely that the recession will not be as long
as that of the early 1980s, the slump again shows that Austria
remains tied to developments in neighboring countries and cannot
rely entirely on its own resources and policies in an uncertain
global environment.
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Background | | Once the center of power for the large Austro-Hungarian Empire, Austria was reduced to a small republic after its defeat in World War I. Following annexation by Nazi Germany in 1938 and subsequent occupation by the victorious Allies in 1945, Austria's status remained unclear for a decade. A State Treaty signed in 1955 ended the occupation, recognized Austria's independence, and forbade unification with Germany. A constitutional law that same year declared the country's "perpetual neutrality" as a condition for Soviet military withdrawal. The Soviet Union's collapse in 1991 and Austria's entry into the European Union in 1995 have altered the meaning of this neutrality. A prosperous, democratic country, Austria entered the EU Economic and Monetary Union in 1999. In January 2009, Austria assumed a nonpermanent seat on the UN Security Council for the 2009-10 term.
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Location | | Central Europe, north of Italy and Slovenia
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Area(sq km) | | total: 83,871 sq km
land: 82,445 sq km
water: 1,426 sq km
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Geographic coordinates | | 47 20 N, 13 20 E
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Land boundaries(km) | | total: 2,562 km
border countries: Czech Republic 362 km, Germany 784 km, Hungary 366 km, Italy 430 km, Liechtenstein 35 km, Slovakia 91 km, Slovenia 330 km, Switzerland 164 km
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Coastline(km) | | 0 km (landlocked)
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Climate | | temperate; continental, cloudy; cold winters with frequent rain and some snow in lowlands and snow in mountains; moderate summers with occasional showers
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Elevation extremes(m) | | lowest point: Neusiedler See 115 m
highest point: Grossglockner 3,798 m
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Natural resources | | oil, coal, lignite, timber, iron ore, copper, zinc, antimony, magnesite, tungsten, graphite, salt, hydropower
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Land use(%) | | arable land: 16.59%
permanent crops: 0.85%
other: 82.56% (2005)
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Irrigated land(sq km) | | 40 sq km (2003)
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Total renewable water resources(cu km) | | 84 cu km (2005)
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Freshwater withdrawal (domestic/industrial/agricultural) | | total: 3.67 cu km/yr (35%/64%/1%)
per capita: 448 cu m/yr (1999)
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Natural hazards | | landslides; avalanches; earthquakes
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Environment - current issues | | some forest degradation caused by air and soil pollution; soil pollution results from the use of agricultural chemicals; air pollution results from emissions by coal- and oil-fired power stations and industrial plants and from trucks transiting Austria between northern and southern Europe
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Environment - international agreements | | party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulphur 94, Air Pollution-Volatile Organic Compounds, Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling
signed, but not ratified: none of the selected agreements
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Geography - note | | landlocked; strategic location at the crossroads of central Europe with many easily traversable Alpine passes and valleys; major river is the Danube; population is concentrated on eastern lowlands because of steep slopes, poor soils, and low temperatures elsewhere
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Population | | 8,210,281 (July 2009 est.)
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Age structure(%) | | 0-14 years: 14.5% (male 609,748/female 581,144)
15-64 years: 67.5% (male 2,785,091/female 2,756,402)
65 years and over: 18% (male 612,613/female 865,283) (2009 est.)
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Median age(years) | | total: 42.2 years
male: 41.1 years
female: 43.2 years (2009 est.)
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Population growth rate(%) | | 0.052% (2009 est.)
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Birth rate(births/1,000 population) | | 8.65 births/1,000 population (2009 est.)
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Death rate(deaths/1,000 population) | | 9.98 deaths/1,000 population (July 2009 est.)
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Net migration rate(migrant(s)/1,000 population) | | 1.85 migrant(s)/1,000 population (2009 est.)
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Urbanization(%) | | urban population: 67% of total population (2008)
rate of urbanization: 0.7% annual rate of change (2005-10 est.)
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Sex ratio(male(s)/female) | | at birth: 1.05 male(s)/female
under 15 years: 1.05 male(s)/female
15-64 years: 1.01 male(s)/female
65 years and over: 0.71 male(s)/female
total population: 0.95 male(s)/female (2009 est.)
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Infant mortality rate(deaths/1,000 live births) | | total: 4.42 deaths/1,000 live births
male: 5.39 deaths/1,000 live births
female: 3.41 deaths/1,000 live births (2009 est.)
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Life expectancy at birth(years) | | total population: 79.5 years
male: 76.6 years
female: 82.56 years (2009 est.)
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Total fertility rate(children born/woman) | | 1.39 children born/woman (2009 est.)
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Nationality | | noun: Austrian(s)
adjective: Austrian
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Ethnic groups(%) | | Austrians 91.1%, former Yugoslavs 4% (includes Croatians, Slovenes, Serbs, and Bosniaks), Turks 1.6%, German 0.9%, other or unspecified 2.4% (2001 census)
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Religions(%) | | Roman Catholic 73.6%, Protestant 4.7%, Muslim 4.2%, other 3.5%, unspecified 2%, none 12% (2001 census)
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Languages(%) | | German (official nationwide) 88.6%, Turkish 2.3%, Serbian 2.2%, Croatian (official in Burgenland) 1.6%, other (includes Slovene, official in Carinthia, and Hungarian, official in Burgenland) 5.3% (2001 census)
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Country name | | conventional long form: Republic of Austria
conventional short form: Austria
local long form: Republik Oesterreich
local short form: Oesterreich
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Government type | | federal republic
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Capital | | name: Vienna
geographic coordinates: 48 12 N, 16 22 E
time difference: UTC+1 (6 hours ahead of Washington, DC during Standard Time)
daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October
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Administrative divisions | | 9 states (Bundeslaender, singular - Bundesland); Burgenland, Kaernten (Carinthia), Niederoesterreich (Lower Austria), Oberoesterreich (Upper Austria), Salzburg, Steiermark (Styria), Tirol (Tyrol), Vorarlberg, Wien (Vienna)
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Constitution | | 1920; revised 1929; reinstated 1 May 1945; note - during the period 1 May 1934-1 May 1945 there was a fascist (corporative) constitution in place
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Legal system | | civil law system with Roman law origin; judicial review of legislative acts by the Constitutional Court; separate administrative and civil/penal supreme courts; accepts compulsory ICJ jurisdiction
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Suffrage | | 16 years of age; universal; note - reduced from 18 years of age in 2007
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Executive branch | | chief of state: President Heinz FISCHER (SPOe) (since 8 July 2004)
head of government: Chancellor Werner FAYMANN (SPOe) (since 2 December 2008); Vice Chancellor Josef PROELL (OeVP) (since 2 December 2008)
cabinet: Council of Ministers chosen by the president on the advice of the chancellor
elections: president elected by direct popular vote for a six-year term (eligible for a second term); presidential election last held 25 April 2004 (next to be held in April 2010); chancellor formally chosen by the president but determined by the coalition parties forming a parliamentary majority; vice chancellor chosen by the president on the advice of the chancellor
election results: Heinz FISCHER elected president; percent of vote - Heinz FISCHER 52.4%, Benita FERRERO-WALDNER 47.6%
note: government coalition - SPOe and OeVP
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Legislative branch | | bicameral Federal Assembly or Bundesversammlung consists of Federal Council or Bundesrat (62 seats; members chosen by state parliaments with each state receiving 3 to 12 members in proportion to its population; members serve five- or six-year terms) and the National Council or Nationalrat (183 seats; members elected by direct popular vote to serve five-year terms)
elections: National Council - last held 28 September 2008 (next to be held by September 2013)
election results: National Council - percent of vote by party - SPOe 29.3%, OeVP 26%, FPOe 17.5%, BZOe 10.7%, Greens 10.4%, other 6.1%; seats by party - SPOe 57, OeVP 51, FPOe 34, BZOe 21, Greens 20
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Judicial branch | | Supreme Judicial Court or Oberster Gerichtshof; Administrative Court or Verwaltungsgerichtshof; Constitutional Court or Verfassungsgerichtshof
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Political pressure groups and leaders | | Austrian Trade Union Federation or OeGB (nominally independent but primarily Social Democratic); Federal Economic Chamber; OeVP-oriented Association of Austrian Industrialists or IV; Roman Catholic Church, including its chief lay organization, Catholic Action
other: three composite leagues of the Austrian People's Party or OeVP representing business, labor, farmers, and other nongovernment organizations in the areas of environment and human rights
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International organization participation | | ACCT (observer), ADB (nonregional member), AfDB (nonregional member), Australia Group, BIS, BSEC (observer), CE, CEI, CERN, EAPC, EBRD, EIB, EMU, ESA, EU, FAO, G-9, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IEA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, MIGA, MINURCAT, MINURSO, NEA, NSG, OAS (observer), OECD, OIF (observer), OPCW, OSCE, Paris Club, PCA, PFP, Schengen Convention, SECI (observer), UN, UN Security Council (temporary), UNCTAD, UNDOF, UNESCO, UNFICYP, UNHCR, UNIDO, UNTSO, UNWTO, UPU, WCL, WCO, WEU (observer), WFTU, WHO, WIPO, WMO, WTO, ZC
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Flag description | | three equal horizontal bands of red (top), white, and red; the flag design is certainly one of the oldest - if not the oldest - national banners in the world; according to tradition, following a fierce battle in the Third Crusade, Duke Leopold V of Austria's white tunic became completely blood-spattered; upon removal of his wide belt or sash, a white band was revealed; the red-white-red color combination was subsequently adopted as his banner
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Economy - overview | | Austria, with its well-developed market economy and high standard of living, is closely tied to other EU economies, especially Germany's. Its economy features a large service sector, a sound industrial sector, and a small, but highly developed agricultural sector. Following several years of solid foreign demand for Austrian exports and record employment growth, the global economic downturn in 2008 led to a recession that is likely to persist through 2009. The government's stabilization measures could increase the budget deficit to about 2.8% of GDP in 2009 and above 3% in 2010, from about 0.6% in 2008. The Austrian economy has benefited greatly in the past from strong commercial relations, especially in the banking and insurance sectors, with central, eastern, and southeastern Europe, but these sectors have been vulnerable to recent international financial instabilities, and some of Austria's largest banks have required government support. Even after the global economic outlook improves, Austria will need to continue restructuring, emphasizing knowledge-based sectors of the economy, and encouraging greater labor flexibility and greater labor participation to offset its aging population and exceedingly low fertility rate.
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GDP (purchasing power parity) | | $331.2 billion (2008 est.)
$324.7 billion (2007 est.)
$313.7 billion (2006 est.)
note: data are in 2008 US dollars
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GDP (official exchange rate) | | $414.8 billion (2008 est.)
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GDP - real growth rate(%) | | 2% (2008 est.)
3.5% (2007 est.)
3.5% (2006 est.)
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GDP - per capita (PPP) | | $40,400 (2008 est.)
$39,600 (2007 est.)
$38,300 (2006 est.)
note: data are in 2008 US dollars
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GDP - composition by sector(%) | | agriculture: 1.9%
industry: 30.7%
services: 67.4% (2008 est.)
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Labor force | | 3.633 million (2008 est.)
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Labor force - by occupation(%) | | agriculture: 5.5%
industry: 27.5%
services: 67% (2005 est.)
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Unemployment rate(%) | | 3.9% (2008 est.)
4.4% (2007 est.)
|
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Population below poverty line(%) | | 5.9% (2004)
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Household income or consumption by percentage share(%) | | lowest 10%: 3.3%
highest 10%: 22.5% (2004)
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Distribution of family income - Gini index | | 26 (2007)
31 (1995)
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Investment (gross fixed)(% of GDP) | | 22.4% of GDP (2008 est.)
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Budget | | revenues: $196.4 billion
expenditures: $200.7 billion (2008 est.)
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Inflation rate (consumer prices)(%) | | 3.2% (2008 est.)
2.2% (2007 est.)
|
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Stock of domestic credit | | $606.2 billion (31 December 2008)
$504.8 billion (31 December 2007)
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Market value of publicly traded shares | | $NA (31 December 2008)
$228.7 billion (31 December 2007)
$191.3 billion (31 December 2006)
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Public debt(% of GDP) | | 62.6% of GDP (2008 est.)
64.2% of GDP (2004 est.)
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Agriculture - products | | grains, potatoes, sugar beets, wine, fruit; dairy products, cattle, pigs, poultry; lumber
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Industries | | construction, machinery, vehicles and parts, food, metals, chemicals, lumber and wood processing, paper and paperboard, communications equipment, tourism
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Industrial production growth rate(%) | | 2.4% (2008 est.)
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Current account balance | | $14.27 billion (2008 est.)
$12.03 billion (2007 est.)
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Exports | | $179.1 billion (2008 est.)
$162.1 billion (2007 est.)
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Exports - commodities(%) | | machinery and equipment, motor vehicles and parts, paper and paperboard, metal goods, chemicals, iron and steel, textiles, foodstuffs
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Exports - partners(%) | | Germany 29.5%, Italy 8.6%, US 4.3%, Switzerland 4.2% (2008)
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Imports | | $179.2 billion (2008 est.)
$160.3 billion (2007 est.)
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Imports - commodities(%) | | machinery and equipment, motor vehicles, chemicals, metal goods, oil and oil products; foodstuffs
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Imports - partners(%) | | Germany 44.5%, Italy 7.1%, Switzerland 5.2%, Netherlands 4.1% (2008)
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Reserves of foreign exchange and gold | | $16.7 billion (31 December 2008 est.)
$18.22 billion (31 December 2007 est.)
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Debt - external | | $832.8 billion (31 December 2008)
$801.4 billion (31 December 2007)
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Stock of direct foreign investment - at home | | $261.9 billion (31 December 2008 est.)
$247.9 billion (31 December 2007 est.)
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Stock of direct foreign investment - abroad | | $270 billion (31 December 2008 est.)
$240.9 billion (31 December 2007 est.)
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Exchange rates | | euros (EUR) per US dollar - 0.6827 (2008 est.), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004)
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Currency (code) | | euro (EUR)
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Telephones - main lines in use | | 3.285 million (2008)
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Telephones - mobile cellular | | 10.816 million (2008)
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Telephone system | | general assessment: highly developed and efficient
domestic: fixed-line subscribership has been in decline since the mid-1990s with mobile-cellular subscribership eclipsing it by the late 1990s; the fiber-optic net is very extensive; all telephone applications and Internet services are available
international: country code - 43; satellite earth stations - 15; in addition, there are about 600 VSATs (very small aperture terminals) (2007)
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Internet country code | | .at
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Internet users | | 5.937 million (2008)
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Airports | | 55 (2009)
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Pipelines(km) | | gas 2,721 km; oil 663 km; refined products 157 km (2008)
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Roadways(km) | | total: 107,262 km
paved: 107,262 km (includes 1,677 km of expressways) (2006)
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Ports and terminals | | Enns, Krems, Linz, Vienna
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Military branches | | Land Forces (KdoLdSK), Air Forces (KdoLuSK)
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Military service age and obligation(years of age) | | 18-35 years of age for compulsory military service; 16 years of age for male or female voluntary service; service obligation 6 months of training, followed by an 8-year reserve obligation; conscripts cannot be deployed in military operations outside Austria (2009)
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Manpower available for military service | | males age 16-49: 1,986,411
females age 16-49: 1,944,834 (2008 est.)
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Manpower fit for military service | | males age 16-49: 1,607,456
females age 16-49: 1,576,335 (2009 est.)
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Manpower reaching militarily significant age annually | | male: 50,540
female: 48,042 (2009 est.)
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Military expenditures(% of GDP) | | 0.9% of GDP (2005 est.)
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Disputes - international | | while threats of international legal action never materialized in 2007, 915,220 Austrians, with the support of the newly elected Freedom Party, signed a petition in January 2008, demanding that Austria block the Czech Republic's accession to the EU unless Prague closed its nuclear power plant in Temelin, bordering Austria
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Electricity - production(kWh) | | 58.64 billion kWh (2007 est.)
|
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Electricity - production by source(%) | | fossil fuel: 29.3%
hydro: 67.2%
nuclear: 0%
other: 3.5% (2001)
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Electricity - consumption(kWh) | | 61.89 billion kWh (2007 est.)
|
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Electricity - exports(kWh) | | 14.93 billion kWh (2008 est.)
|
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Electricity - imports(kWh) | | 19.8 billion kWh (2008 est.)
|
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Oil - production(bbl/day) | | 24,850 bbl/day (2008 est.)
|
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Oil - consumption(bbl/day) | | 285,400 bbl/day (2008 est.)
|
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Oil - exports(bbl/day) | | 45,580 bbl/day (2008 est.)
|
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Oil - imports(bbl/day) | | 305,000 bbl/day (2008 est.)
|
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Economic aid - donor | | ODA, $1.498 billion (2006)
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Oil - proved reserves(bbl) | | 50 million bbl (1 January 2009 est.)
|
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Natural gas - production(cu m) | | 1.532 billion cu m (2008 est.)
|
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Natural gas - consumption(cu m) | | 8.65 billion cu m (2008 est.)
|
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Natural gas - exports(cu m) | | 2.788 billion cu m (2008)
|
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Natural gas - proved reserves(cu m) | | 16.14 billion cu m (1 January 2009 est.)
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HIV/AIDS - adult prevalence rate(%) | | 0.2% (2007 est.)
|
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HIV/AIDS - people living with HIV/AIDS | | 9,800 (2007 est.)
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HIV/AIDS - deaths | | fewer than 100 (2003 est.)
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Literacy(%) | | definition: age 15 and over can read and write
total population: 98%
male: NA
female: NA
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School life expectancy (primary to tertiary education)(years) | | total: 15 years
male: 15 years
female: 16 years (2006)
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Education expenditures(% of GDP) | | 5.4% of GDP (2005)
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