In a current article of WIFO-Monatsberichte (WIFO monthly report), Matthias Firgo and Ulrike Famira-Mühlberger present the first estimate of the fiscal costs of the abolition of the asset recourse in inpatient long-term care. According to the report, this resulted in additional expenses of about 273 million € for the Länder and municipalities in 2018.

The mood of Austrian companies remains sceptical in June. Although the WIFO business climate index (seasonally adjusted) rose by 7.6 points, at –20.7 points it was in the range of the values achieved during the financial market and economic crisis of 2008-09. The COVID-19 crisis continues to keep the Austrian economy in its grip.

The measures adopted to contain the COVID-19 pandemic give rise to a recession in Austria. With a slump by 7.0 percent year-on-year, demand and output will contract even more sharply in 2020 than during the economic and financial market crisis of 2008-09. Since the trough now appears to have been passed, the recession promises to be short. Nevertheless, GDP will still not be back to its pre-crisis level by the end of the projection horizon (end of 2021).

According to WIFO's latest Quarterly National Accounts, Austrian economic output in the first quarter of 2020 declined by 2.9 percent year-on-year and by 2.6 percent seasonally adjusted compared to the previous quarter. Relative to the flash estimate at the end of April, this represents a slight downward revision.