After contracting 1.4% between April and June this year, Austria’s GDP declined by 1.8% in real terms between July and September, signalling the country’s economy has slipped into recession according to a statement by Statistics Austria.

A recession is determined by two consecutive quarters of economic contraction.

“Following the economic boom until mid-2022, the economic slowdown has continued with slightly negative growth rates since the second quarter of 2023,” according to a statement by Tobias Thomas, Director General of Statistics Austria.

Thomas went on to add that Austria’s recession is largely a result of the falling economic output of industry and trade, declining by 4.2% and 7.6% year-on-year in the third quarter of this year.

Austria, which has suffered high inflation since the start of 2022, has seen its annual inflation decline from 11.2% in January to 5.4% in October, predominantly due to falling energy prices, according to Statistics Austria.

In addition, Austria reported strong growth in its tourism sector this year, with a record-high number of overnight stays reaching 80.89 million between May and October throughout the summer season.

“Austrian accommodation establishments were better booked this year than in any other summer,” Thomas added.

Furthermore, in its latest economic outlook report published last week, the Organization for Economic Cooperation and Development (OECD) forecasted that the Austrian economy will contract by 0.4% in 2023. The OECD predicts the country’s economic growth will slowly rally to 0.6% next year and 1.5% in 2025.