GDP Increased by 4.3 Percent in the Second Quarter of 2021

30.07.2021

WIFO Flash Estimate: Industry and Easing of Measures Shaped Economic Recovery

According to the latest WIFO Flash Estimate, Austria's economic output expanded by 4.3 percent in the second quarter of 2021 compared to the previous quarter. This was the first-time growth resumed after the two negative previous quarters.

With the easing of the measures taken to contain the COVID-19 pandemic in mid-May, an increase in the consumer demand of private households as well as an increase in the value added of consumption-relevant service sectors (especially accommodation and food service activities) were recorded. The recovery of the industrial economy continued in the second quarter.

Important information:

Since the end of September 2020, the Quarterly National Accounts are compiled and published by Statistics Austria. The WIFO Flash Estimate builds on this calculation and provides an estimate for the following quarter. This includes GDP and components in the form of seasonally and working-day adjusted rates of change compared with the previous quarter (key figure according to Eurostat standard).

The figures presented in this calculation are first estimates and as such are subject to uncertainties and possible revisions.

At the end of August 2021, Statistics Austria will publish quarterly data for GDP and main aggregates for the second quarter of 2021 based on more complete data.

In the second quarter of 2021, economic dynamics were again influenced by the health policy measures and their easing in mid-May. After the decline in GDP in the fourth quarter of 2020 (–3.1 percent) and in the first quarter of 2021 (–1.1 percent), there was a quarter-on-quarter increase in domestic economic output. According to first calculations, GDP in the second quarter of 2021 increased by 4.3 percent compared to the previous period (key figure according to Eurostat standard). This means that domestic economic output was 11.4 percent higher than in the same quarter of the previous year. This strong increase is also due to the very weak level in the second quarter of 2020. Here, the economic consequences of the COVID-19 pandemic fully took effect for the first time (–13.2 percent).

With the easing of the measures in mid-May, there was a strong expansion of economic output in the sectors most affected by the crisis, namely trade, transport, accommodation and food services activities (+20.5 after –9.5 percent in the first quarter of 2021 in a quarter-on-quarter comparison) and other services (+7.1 after –6.3 percent in the first quarter of 2021, includes among others arts, entertainment and recreation and body-related services). Consumer demand from households (including private non-profit institutions serving households) also rose strongly (+3.8 after –3.5 percent in the first quarter of 2021).

After the industrial economy gained momentum in the first quarter, the positive momentum continued in the second quarter. Value added in industry (NACE 2008, sections B to E) rose by 2.3 percent in the second quarter (after +2.7 percent). The construction industry stagnated at a high level (–0.6 after +4.8 percent). Business investment demand also developed positively. Gross fixed capital formation expanded by 2.1 percent (first quarter of 2021 +3.3 percent).

Travel exports benefitted from the easing of travel restrictions and the opening steps in accommodation and food service activities. Against the backdrop of the international economic recovery, goods exports also rose, with exports up 14.9 percent on the previous quarter. With an increase in imports of 9.8 percent, net exports made a positive contribution to overall economic growth.

 

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Sandra Bilek-Steindl

Research groups: Macroeconomics and European Economic Policy

Jürgen Bierbaumer

Research groups: Macroeconomics and European Economic Policy
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© yasin hm/Unsplash