Austria’s Finance Minister Markus Marterbauer (SPÖ) has warned that the country is likely heading into a recession this year, which will negatively affect the national budget. Speaking at the EU Council of Economic and Financial Affairs (ECOFIN) in Brussels, Marterbauer said that the upcoming forecast from the Austrian Institute of Economic Research (WIFO) is expected to show negative growth.
He explained that a weaker economy would mean lower tax revenues, creating challenges for the budget. WIFO’s last forecast in December predicted a small growth of 0.6%, but Marterbauer now expects a contraction.
Despite these concerns, Marterbauer stressed that Austria’s government is determined to avoid an excessive deficit procedure with the European Union. “We are confident we will succeed. If new issues arise, we will address them,” he stated.
On EU defense spending, Marterbauer emphasized the need for careful budgeting. “We cannot afford to waste resources. Every euro counts, and even defense spending must be efficient,” he said.
Marterbauer also shared that Austria’s Parliament had already passed initial budget reforms, a move seen as positive by EU partners. He announced plans to introduce a dual budget for 2025/26 by mid-May.
However, he acknowledged the tough road ahead, noting that Austria is likely in its third year of recession, with unemployment rising. “We need more measures to boost the economy. Budget reforms will only work if the economy recovers and jobs grow,” he concluded.
