Vienna – Economic forecasts in the midst of a crisis are naturally difficult. Not least because of this, the economic research institutes Wifo and IHS are currently assuming two scenarios, explained Wifo boss Christoph Badelt at the presentation of the new economic forecast on Friday.
In its optimistic forecast for this year, Wifo predicts 2.3% growth and the pessimistic 1.5% growth. The difference corresponds to a GDP difference of three billion euros for the entire year, which is “a fully grown bull elephant” and “not just a baby elephant”, according to Badelt. According to the opening scenario, the economy would pick up again, but only if the restrictions were completely lifted in the course of spring. The Covid 19 crisis is likely to have a longer lasting effect, according to Wifo, because private consumption and travel would be lower in both scenarios in 2022 than before the crisis.
After moderate growth in 2021, there should be a strong recovery in 2022. Here the Wifo expects 4.3 and 4.7% respectively in the opening and lockdown scenarios, the IHS 4.3% plus. However, the opening variant could already be partially obsolete. It is assumed, for example, that there are no restrictions beyond the status of Monday, March 22nd – the six-day Easter lockdown was only announced afterwards – and that catering and accommodation will be open from mid-April. It is also assumed that the travel warnings will gradually be lifted between the end of April and the end of June.
In itself, it is clear: the more massive lockdown measures with restrictions, the more the economy will be slowed down, according to IHS expert Michael Reiter. Because every week lockdown would have an impact of 400 to 800 million euros or 0.1 to 0.2% on GDP. The key to eliminating the economic crisis definitely lies in the further development of the pandemic – and thus the economy in the hands of health policy, said Badelt. For health policy this means “testing and vaccination”.
The consequences of the Corona crisis will also be visible on the labor market for even longer. In its opening scenario, Wifo assumes an unemployment rate of 9.2 and 8.4% for the two years and in the lockdown scenario of 9.3 and 8.5%. The Wifo boss sees a solution above all in the qualification of the employees. But reintegration measures sponsored by the state should also be discussed “free of ideology”. Companies should also be involved in the campaigns. Reiter demands that education policy must ensure that those who have lost something through school closings or distance learning can make up for it before they graduate.
For public budgets, Wifo calculates a decrease to 7.7% of GDP this year and 4% for the coming year, after minus 8.9% in the previous year. In the opening scenario, a negative balance of 7.1 and 3.7% is expected. The IHS estimates the negative balances for 2021 and 2022 at 6.6 and 3.5%, respectively. The budgets for 2021 and 2022 are also shaped by measures to counter the consequences of the crisis: While the grants for companies and the use of short-time work will be lower in 2021 than in 2020, the heavy use of the investment bonus will “significantly increase” the deficit this year and next. When the crisis comes to an end, the IHS hopes that a comprehensive economic strategy should be developed. Such a strategy would require structural reforms and measures to achieve the climate goals. (hu)