General

Austria is one of the 10 richest countries in the world in terms of GDP per capita, has a well-developed social market economy, and a very high standard of living. Until the 1980s, many of Austria's largest industry firms were nationalised; in recent years, however, privatisation has reduced state holdings to a level comparable to other European economies. Labour movements are particularly strong in Austria and have large influence on labour politics. Next to a highly-developed industry, international tourism is the most important part of the national economy.

Forestry, cattle raising, and dairying are prevalent throughout the alpine provinces; Vorarlberg has an ancient textile industry. About 3% of the population is employed in mostly small-scale agriculture; the country is nearly self-sufficient in terms of food production. In Upper and Lower Austria and in Burgenland, tillage agriculture predominates: the chief crops are potatoes, sugar beets, fruit, barley, rye, and oats.

Manufacturing is diversified and accounts for over 30% of the gross national product. More than half of the industries are concentrated in the Vienna basin; Linz, Steyr, Graz, Leoben, Innsbruck, and Salzburg are the other chief industrial centres. The chief manufactures are machinery, vehicles, iron and steel, communications equipment, chemicals, and paper and wood products. Food processing is also important, and many minerals necessary for industry (graphite, iron, magnesium, copper, zinc, and lignite) are found in Austria. The country also has deposits of crude oil and salt, and is rich in hydroelectric power.

In recent years, service industries, including a large banking sector, have become important to Austria's economy, and they now employ some 70% of the nation's workforce. Tourism is also important. The main trading partners are Germany, Italy, Switzerland and the United States.

Overview

Economy - overview:
Austria, with its well-developed market economy and high standard of living, is closely tied to other EU economies, especially Germany's. The Austrian economy also benefits greatly from strong commercial relations, especially in the banking and insurance sectors, with central, eastern, and southeastern Europe. The economy features a large service sector, a sound industrial sector, and a small, but highly developed agricultural sector. Membership in the EU has drawn an influx of foreign investors attracted by Austria's access to the single European market and proximity to the new EU economies. The outgoing government has successfully pursued a comprehensive economic reform program, aimed at streamlining government and creating a more competitive business environment, further strengthening Austria's attractiveness as an investment location. It has implemented effective pension reforms; however, lower taxes in 2005-06 led to a small budget deficit in 2006. Weak domestic consumption and slow growth in Europe held the economy to growth rates below 3% in 2002-05. Due to higher growth across Europe, Austria grew 3.3 percent in 2006. To meet increased competition - especially from new EU members and Central European countries - Austria will need to continue restructuring, emphasizing knowledge-based sectors of the economy, and encouraging greater labour flexibility and greater labour participation by its aging population.

GDP (purchasing power parity):
$284.1 billion (2006 est.)

GDP (official exchange rate):
$310.4 billion (2006 est.)

GDP - real growth rate:
3.3% (2006 est.)

GDP - per capita (PPP):
$34,700 (2006 est.)

GDP - composition by sector:
agriculture: 1.6%
industry: 30.6%
services: 67.8% (2006 est.)

Labour force:
3.52 million (2006 est.)

Labour force - by occupation:
agriculture: 3%
industry: 27%
services: 70% (2005 est.)