Austria’s economy is hitting a rough patch, with leading experts warning of tougher times ahead and mounting pressure on the government to find billions in fresh savings, according to Kurier. The country’s top economic think tanks, WIFO and IHS, have sharply downgraded their 2026 growth forecasts after the war in Iran pushed global energy prices higher. What looked like modest but stable growth of around 1 percent now appears far weaker: WIFO expects just 0.9 percent and IHS an even gloomier 0.5 percent. Inflation, meanwhile, continues to hover well above the government’s 2-percent target.
Speaking on ORF’s “Press Hour” on Sunday, WIFO chief Gabriel Felbermayr described Austria’s economic outlook as “very wobbly” and urged Finance Minister Markus Marterbauer to plan cautiously. With Marterbauer targeting €2 billion in savings for the upcoming double budget, Felbermayr warned that figure might not be enough. “To be safe, it should be closer to three or four billion,” he said, emphasizing that the government needs broader safety buffers.
When asked where such savings could come from, Felbermayr pointed directly to the pension system. Simply undoing special pension increases granted since 2019 could save around €1.7 billion, he noted. But beyond that, he called for deeper structural reforms including tougher deductions for early retirees and stronger incentives for people to work longer. He also suggested reviewing generous public subsidies to political parties.
Felbermayr gave cautious approval to recent price intervention measures such as Austria’s fuel price cap, reduced VAT on basic foods, and the social electricity tariff. These policies, he said, help slow inflation without increasing national debt. Still, he warned that additional support will be needed for the job market, particularly for women, who may face growing difficulties as the slowdown unfolds.
On energy policy, Felbermayr pushed for faster progress on renewables, arguing that Austria remains too vulnerable to oil and gas shocks. He urged the creation of summer electricity surpluses that could later be stored as gas via electrolysis. Finally, Felbermayr dismissed calls for a wealth tax, saying it’s unfair, hard to implement, and unlikely to raise significant revenue, though he agreed Europe must do more to tackle tax havens.
