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Economy |
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Economy
Since the beginning of 1995 Austria has been a member of the European Union. This step has accelerated the process of economic adjustment initiated when Austria joined the European Economic Area (EEA) in January 1994. Membership of the EU offers Austria the opportunity to enlarge the scope of its integration above and beyond purely economic matters. The challenges that face Austria in the future will be securing the greatest possible congruence of its economic policy with common EU policies, most notably in the fields of trade, agriculture, regional development, taxation and monetary policy.
Austria is in a strong position here, being one of the wealthiest and most stable of the EU member countries. Its economic system, a free market economy with a strong emphasis on social factors favouring the economically less privileged, will be retained in the EU, as will the successful system of Economic and Social Partnership, which has traditionally played an important conciliatory role in the country´s wages and price policy.
Having reached the required level of convergence Austria is one the 11 EU-countries that entered into phase 3 of the Economic- and Monetary Union (EMU) in the beginning of 1999. The introduction of the Euro banknotes and coins on 1.1.2002 was a milestone in the longtime process of economic convergence and integration. While this entails forgoing the possibility of an independent national monetary and exchange rate policy, at the same time it means that Austria has become a member of the world´s second-largest economic area.
Austria is a highly developed industrialised nation with an important service sector.
The foremost industries are foodstuffs and luxury commodities, mechanical engineering and steel construction, chemicals and vehicle manufacturing. Within the vehicle sector, the production of engines and transmissions is the most important area, accounting for an export quota in excess of 90%. Austria manufactures some 800,000 engines per annum for many major car manufacturers. In the electronic engineering field, Austria has made a name for itself with the production of customised electronics products like microprocessors and integrated circuits (chips for airbags, ABS braking systems; components for Airbus airliners and for high-speed trains etc.)
The primary sector (agriculture and forestry) accounted for only about 3% of Austria´s gross domestic product, while the secondary sector (commodities manufacture, energy, mining) accounted for about 35%, and the tertiary sector (services, banking, public services, commerce, transport, tourism) accounted for about 62% of GDP.
Some 18% of Austria´s surface area is covered by farm land, 27% by grassland and 47% by woods and forests. 41% of Austria´s total area is suitable for agriculture. 5% of all employed persons in Austria work in agriculture and forestry. With its 20,000 organic farmers, Austria occupies a leading position in this branch of agriculture in Europe.
In the field of raw materials and energy generation Austria can draw on abundant resources. It has deposits of iron ore, non-ferrous metals, important minerals and earths. However, the constant growth of the industrial sector necessitates supplementary imports to an ever increasing degree. This is also true of fuels and energy and of the electricity generating industry. Austria has its own resources of oil and natural gas. Austria is the European Union´s number one generator of hydro-electric power.
The predominant feature of Austria´s industrial and commercial sectors is its high proportion of medium-size enterprises. Austrian industry covers every branch of manufacture, from basic goods to the labour-intensive production of finished goods. Ever greater importance attaches to plant construction (encompassing the planning, delivery and assembly of turn-key industrial facilities including the requisite operational expertise). This field is strongly export-oriented, as is the electronics sector (e.g. the production of integrated circuits).
Austria´s handicrafts are famous throughout the world - most notably fine hand-crafted items, costume jewellery, ceramics and glassware.
One of the areas in the tertiary sector which reports high rates of foreign currency earnings is tourism. In 2003, there were all in all 118 million overnight stays, of which foreign visitors accounted for 86.3 million.
As an export-oriented country, Austria maintains a wide-ranging and highly diverse foreign trade system. It trades with some 150 countries. The countries of the European Union account for some two thirds of Austria´s foreign trade. Since the opening of Eastern Europe in 1989 Austrian exports to this region grew at a significantly higher rate than exports overall. In 2003 Austria´s exports to Eastern European countries totalled 14.5 billion Euro, that is compared to only 2.5 billion Euro in 1988. About one third of all Austrian foreign investments are made in the Eastern European countries that are candidates for becoming EU members. In some of these countries up to a tenth of direct foreign investments stem from Austria.
In 2003 the mean unemployment rate in Austria stood at 7.0% (according to national calculation method; 4.3% according to EU-method). Again, the Austrian unemployment rate was remarkably low in international comparison. Austria´s balance of payments shows a permanent deficit in the trade balance, while the services balance (tourism) is generally positive. Recently, Austrian export success lead to a noticable improvement which resulted in a roughly even balance of payments for 2002. In 2003 the balance of payments showed a deficit of 2 billion Euro or 0.9% of the gross domestic product and is therefore still in the "balanced" range of +/- 1% of GDP.
In the world political arena, Austria has established itself as an international place of encounter, as exemplified by the countless summit meetings and international conferences which it has hosted. In the same measure, Austria is assuming increasing importance in the transport sector as a key communications hub between the economic areas of Europe. A factor of growing importance is the European energy transit network (the transport of oil, natural gas and electricity) through Austria.
Apart from Austria´s accession to the EU, the ´nineties´ were, in essence, characterised by the upswing in foreign trade with Eastern European countries. The degree of economic integration in some sectors even exceeds the figures achieved during the Austro-Hungarian monarchy. In the last decade of the 20th century EU accession and the pressure of globalisation prompted Austria to take important steps towards stepping up its efficiency and modernising its economy. Determination to stay on this path will be of decisive importance.
At the beginning of the 21st century, Austria presents itself as a modern, confident EU Member State full of optimism for the future.
Downloads:
These pdf files elaborated by the Austrian National Bank deal with the exposure of Austrian Banks in Central, Eastern and Southeastern Europe as well as other parts of the world.
 Facts_on_Austria_and_its_Banks_Digest
Facts_on_Austria_and_its_Banks
External Links:
Federal Ministry of Economy, Family and Youth
Federal Ministry of Finance
Austrian National Bank
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