Austria has relatively strong macroeconomic fundamentals but further economic slowdown in the euro area creates challenges for the country. In 2016, the EPI projects Austria to have an EPI score of 92.6%, or a B grade.

Austria is one of the richest countries in the world in terms of GDP per capita, with a well-developed social market economy and high standards of living. Germany has historically been the main trading partner of Austria, but since Austria became a member state of the EU, it has gained closer ties to other EU economies, reducing its economic dependence on Germany.

Austria’s GDP is projected to accelerate to 1.6% in 2016 versus 0.8% in 2015, driven by the recovery of countries in the EU and in Germany, in particular. Inflation is likely to started picking up, despite low oil prices. Due to conservative fiscal policies, budget deficit is projected to decrease further, to 1.7% in 2016. Its unemployment level of 5.6% is low by European standards.

The 5-Minute Economist projects Austria’s EPI score to stay at a B level by 2020, with gradually increasing inflation compensated by improved GDP growth.