Coronavirus-hit Austria Economy To Shrink In 2020

Austria's economy is predicted to shrink at least 2.5 percent in 2020 if strict movement restrictions to fight the new coronavirus spread are lifted step-by-step by the end of April, economists said Thursday

Vienna, (UrduPoint / Pakistan Point News - 26th Mar, 2020 ) :Austria's economy is predicted to shrink at least 2.5 percent in 2020 if strict movement restrictions to fight the new coronavirus spread are lifted step-by-step by the end of April, economists said Thursday.

The Austrian Institute of Economic Research (WIFO) and the Institute for Advanced Studies (IHS) both predicted recessions.

WIFO director Christoph Badelt said his institute revised this year's economic growth forecast to minus 2.5 percent, down from plus 1.3 percent before the novel coronavirus crisis hit countries around the world.

"This is an optimistic scenario," Badelt said, adding it assumed measures to fight the pandemic were lifted end of April, and nothing else unexpected and averse happened.

IHS director Martin Kocher said growth could fall to as much as minus 5.0 percent if measures limiting movements were extended until end of May.

Austria's government last week ordered people to stay indoors other than for a few exceptions, such as going to work -- if they cannot work from home -- or going shopping.

Schools, restaurants and many shops have closed; supermarkets, pharmacies and drug stores remain open.

The measures are due to last until at least mid-April, but the government has said it will continuously evaluate whether it will extend them.

The small Alpine eurozone country also announced last week a 38-billion-euro ($42bln) rescue package to combat the economic fallout of the health crisis.

This includes 15 billion Euros of aid for those sectors worst affected by the wide-ranging shutdown.

WIFO predicted debt of 5.4 percent of gross domestic product, higher than the EU's usual debt ceiling of 3.0 percent and much higher than the government's 0.3 percent target.

The country of nine million people has recorded more than 6,000 confirmed new coronavirus cases so far, with 42 deaths.