December 12, 2016 / 9:04 AM / a year ago

Austrian central bank sticks to forecast of modest Austrian recovery

VIENNA, Dec 12 (Reuters) - Austria’s central bank has kept its economic growth forecasts for this year and next unchanged, predicting a modest recovery for both years, it said in an economic forecast published on Monday.

Household consumption and company investments are expected to continue to drive growth, helped by a tax reform this year that was aimed at reducing most households’ tax burden.

Gross domestic product (GDP) would rise 1.4 percent this year and 1.5 percent next year, the Austrian National Bank said in its half-yearly economic forecast.

It revised the 2016 forecast downwards in September from a previous 1.6 percent when consumption was found to be weaker than expected.

“The Austrian economy is currently in a recovery phase driven by domestic demand,” the central bank said in a statement, adding that GDP growth has been below 1 percent for the past four years.

It also kept its inflation outlook for the next two years unchanged since a forecast in October. The harmonised index of consumer prices will rise 0.9 percent this year and 1.5 percent next year, it said. (Reporting by Francois Murphy; Editing by Kirsti Knolle)

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