For stable finances

Rating agency: Austria needs more reforms

(Bild: APA/ALEXANDER KLEIN)

The European rating agency Scope sees a need for reform in Austria. "In the longer term, Austria must continue to consolidate in order to comply with EU fiscal rules", according to an analysis by the credit rating agency. 

The outlook for public finances "depends crucially on how the new government will tackle the country's long-standing problems". There is a need for reform primarily in the pension system as well as health and care costs.

Incentives for the labor market necessary
Scope also believes that structural reforms are necessary for the Austrian labor market. For example, new incentives could be created to increase labor market participation - especially for women and older people. This could "increase production potential and relieve the burden on the budget".

(Bild: APA/AFP )

New government needs a sure instinct
The credit rating watchdogs assume that gross domestic product will grow by 0.5 percent this year. "The new government must carefully calibrate fiscal consolidation so as not to stifle the tentative economic recovery," the analysis states. Average annual growth of around 1.2 percent is forecast from 2026 to 2028.

The right-wing FPÖ and the conservative ÖVP are in talks about forming a government. In mid-January, they presented an austerity package worth billions in order to avoid EU deficit proceedings. The parties want less spending and are cutting back on climate protection in particular.

Scope gives Austria a credit rating of AA+ and a stable outlook. This attests to the country's "very strong credit quality". However, its neighbors Germany and Switzerland are rated even better: they have the coveted AAA rating, which signals an extremely low default risk to buyers of government bonds.