COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Austria Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Austria
Date: 2025-06-04
Institutions: European Commission, Reform and Investment Task Force
Subjects: Austria, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 4.6.2025  SWD(2025) 220 final  COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Austria Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of Austria {COM(2025) 220 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

Austria’s economy is going through 
a three-year recession 

In  2025,  Austria  is  likely  to  experience 
recession for the third year in a row. After 
contracting by 1.2% in 2024 and 1% in 2023, 
GDP is  expected  to  fall  by  0.3%  in  2025.  The 
government  deficit  is  expected  to  be  well 
above 4% exceeding the treaty threshold.  

The downturn is driven by a weakness of 
industry, broad-based cost pressures and 
lower  exports.  Industrial  production  dropped 
by 5% in 2024, with reductions in intermediate 
goods,  durable  consumer  goods  and  capital 
goods  most  pronounced.  Austria  has  lost  cost 
competitiveness since 2019, with nominal unit 
labour  costs  increasing  10%  more  than  the 
euro  area  average,  mostly  due  to  higher 
inflation(1) . 
notably 
manufactured  goods  and  machinery,  have 
declined  by  5.9%  in  2024.  Increasing  trade 
tariffs are expected to harm exporters further, 
as  the  USA  is  the  second  most  important 
destination  for  Austrian  goods  exports  after 
Germany. 

exports, 

Goods 

declined 

in  2023, 

Having 
private 
consumption  stagnated  in  2024.  Russia’s 
war  of  aggression  against  Ukraine  and  the 
ensuing  energy  and  inflation  crisis  had  a 
lasting  impact  on  consumer  confidence  in 
Austria,  leaving  it  significantly  below  its  pre-
pandemic  average.  Real  disposable  household 
incomes  overcame  a  long  period  of  decline 
and  stagnation,  finally  sustainably  surpassing 
their  2008  peak  in  the  second  quarter  of 

2024. However, the additional incomes did not 
boost  demand  and  mostly  went  into  savings, 
with  the  gross  savings  rate  increasing  by 
roughly 2 percentage points to reach 18.4%, a 
value  unseen  in  non-pandemic  times  since 
1995. 

Investment  shrank  in  2023  and  2024, 
driven  by  a  decline  in  construction  and 
equipment investment. Higher interest rates 
put a halt to a construction boom and a strong 
rise  in  house prices that  had  been  developing 
since  2015 (2).  In  2024,  new  building  permits 
for residential buildings were 54% below their 
peak  in  2021.  Equipment  investment  declined 
by  4.7%,  reflecting  the  struggling  industrial 
sector. However, in 2025, some stabilisation of 
investment  is  expected  as  the  volume  of 
mortgage  loans  picked  up  in  the  second  half 
of 2024 (3). 

After  reaching  very  high  levels  in  2022 
and  2023,  inflation  declined  in  2024. 
Inflation  reached  a  peak  of  8.6%  in  2022, 
stayed very high in 2023 at 7.7%, but declined 
in  2024  to  2.9%  thanks  to  declining  energy 
prices.  However,  the  phase-out  of  energy- 
related  relief  measures  together  with  higher 
oil  prices  led  the  inflation  rate  to  increase 
again at the start of 2025. It is now expected 
to  stay  above  2%  in  2025  (2.9%)  and  2026 
(2.1%) 

Despite  the  recession,  the  labour  market 
has  remained  resilient.  The  unemployment 
rate has been on the rise since its low point of 
4.8%  in  2022,  but  it  is  expected  to  remain 
contained  at  5.3%  in  2025.  The  employment 
rate  has  been  stable  at  77.2%.  This  modest 

(1)  In 2019, Austrian nominal unit labour costs exceeded 
the euro area average by 6.4%. In 2024, they were 
16.5% higher. See Eurostat: Labour productivity and 
unit labour costs. nama_10_lp_ulc. 

(2)  European Commission 2024, Alert Mechansim Report 

2025, Statistical Annex. 

(3)  OENB, 2025, Sinkende Kund:innenzinssätze bei Krediten 
und Einlagen - Oesterreichische Nationalbank (OeNB). 

2 

 
 
 
 
Deficit remains high despite fiscal 
consolidation efforts 

Graph 1.1: General government budget balance 
and gross debt (in % of GDP) 

Source: European Commission, Spring Forecast 2025 

to 

faces 

significant 

fiscal 
Austria 
consolidation challenges. These include  the 
ageing-related  increase  in  public  spending  on 
pensions,  health  care  and  long-term  care.  In 
the  deteriorated  economic 
part  due 
situation,  the  public  debt  ratio  is  expected  to 
remain  high,  reaching  around  84.0%  and 
85.8% of GDP in 2025 and 2026 respectively. 
In  2024,  the  deficit  reached  4.7%  of  GDP.  A 
deficit of 4.4% and 4.2% is projected for 2025 
and 2026. Austria’s newly formed government 
has  committed  to  consolidation  measures 
aiming to achieve savings of EUR 6.4 billion in 
2025 and EUR 8.4 billion in 2026. 

Rising  public  spending  in  Austria  driven 
by inflation and ageing costs. In 2024, net 
expenditure  in  Austria  grew  by  8.7%  (see 
Annex  1).  This  increase  is  mainly  driven  by 
high spending on public salaries, pensions and 
social  expenditure  due  to  inflation  indexation 
and  other  ageing-related  costs  continue  to 
weigh significantly on public finances. In 2025, 
net expenditure is forecast by the Commission 
to grow by 2.0%, which is below the maximum 

deterioration in the labour market also has to 
do  with  demographic  trends  and  shifts  in 
working  hours.  2024  was  the  first  year  in 
which Austria’s working age population started 
declining.  At  the  same  time,  the  recourse  to 
part-time  work,  which  is  already  the  second 
largest  in  the  EU  at  30.7%,  increased  further, 
thus  reducing  the  total  working  hours  per 
person  employed.  The  number  of  people 
employed  stayed  roughly  constant  due  to 
migration  and  the 
increasing  number  of 
women  and  older  people  working,  reflecting 
the  gradual  increase  in  women’s  statutory 
retirement  age.  Over  the  coming  years,  the 
total  number  of  people  employed  is  expected 
to  continue  increasing  slightly  despite  the 
decline in the working age population, but it is 
not  clear  whether  this  would  also  lead  to  an 
increase 
total  hours  worked.  These 
demographic  trends  and  behavioural  shifts 
reduce  Austria’s  capacity  to  grow  in  the  long 
run. 

in 

In  2023, 

Labour  productivity 
is  comparatively 
high,  but  its  growth  has  been  slowing 
down  since  2008. 
labour 
productivity in terms of GDP per hours worked 
was  116%  of the  EU  average,  placing  Austria 
in  the  top  quartile  of  EU  Member  States. 
However,  labour  productivity  growth  has  seen 
a structural decline since the financial crisis in 
2008.  From  1995  to  2007,  annual  growth  of 
labour  productivity  averaged  1.8%,  but  since 
then,  the  rate  has  dropped  to  0.6%,  with  the 
construction  sector  being  an  important  driver 
of  the  slowdown  in  growth.  In  the  same  vein, 
total  factor productivity  (TFP)  growth  declined 
from  an  average  of  0.8%  (1996-2005)  to 
0.4%  (2006-2019)  (4).  While  declines  in  TFP 
growth  are  being  observed in many  advanced 
economies, in Austria the trend of TFP growth 
is  now  below  the  euro  area  average.  This 
development  is  perilous  for  long-term  growth 
prospects,  especially  as  the  most  important 
factor of production – labour – is set to decline 
as well. 

(4)  Austrian Productivity Board, 2024: Annual productivity 

report 2024. 

3 

-10.00-8.00-6.00-4.00-2.000.002.00010203040506070809010017181920212223242526Gross debt (lhs)Budget balance (rhs)forecast-3.00 
 
   
growth  rate  committed  to  by  Austria  in  its 
medium-term fiscal structural plan (5). 

is  planned 

Defence  expenditure 
to 
increase gradually from a low level. While 
Austria’s  neutrality  (6)  is  enshrined  in  its 
the  new 
constitution  and  upheld  by 
is 
government, 
slowly 
capabilities.  
strengthening 
Austria’s defence budget amounted to 0.7% of 
GDP  in  2024  but  is  envisaged  to  gradually 
increase  under  the  Austrian  Armed  Forces 
Development Plan 2032+. 

country 
defence 

the 
its 

Austria’s  federal  structures  rely  on  a 
complex  system  of 
intergovernmental 
transfers,  which  may  constrain  the 
efficiency  of  public  spending.  Nearly  one-
third of all tax revenues are redistributed from 
the federal government to the Länder (federal 
states)  and  municipalities  through  the  fiscal 
equalisation  system  and  other  mechanisms 
(7).   While  these  sub-national  entities  play  a 
in  delivering  essential  public 
crucial  role 
services,  such  as  care  and  public  transport 
infrastructure, they have limited tax autonomy. 
Ideas  have  been  put  forward  to  reform  the 
fiscal  equalisation  system  (8).  These  include 
aligning 
financing 
spending 
responsibilities, achieving transparency as well 
as  responsibility  and  accountability,  extending 
regional  tax  autonomy,  and  reducing  the 
number  of  policy  fields  resting  on  mixed 
financing, 
and 
fragmented  decision-making,  as  a  way  to 
enhance fiscal sustainability and efficiency. 

responsibilities, 

joint 

and 

tax, 

(5)  Austria submitted its medium-term fiscal-structural 

plan on 13 May 2025. 

(6)  In 1955, Austria passed a constitutional law on 

‘perpetual neutrality’ which prohibits any membership in 
military alliances and the setting up of foreign military 
bases. 

(7)  Mitterer & Pichler (2023), Factsheet Finanzausgleich 

Kompakt 2023. KDZ, Zentrum für 
Verwaltungsforschung. 

(8)  Schratzenstaller, M. (2015). Reforming Austrian Fiscal 
Federalism: Options, Obstacles, and Pitfalls. In G. 
Bischof & F. Karlhofer (Eds.), Austrian Federalism in 
Comparative Perspective (Vol. 24, pp. 54-69). University 
of New Orleans Press. 
https://doi.org/10.2307/j.ctt1n2txpf.8. 

4 

Austria’s  tax  mix  is  highly  reliant  on 
labour  income  and  consumption,  with 
property and environmental taxes playing 
a secondary role. Labour taxation and social 
contributions are among the highest in the EU, 
hindering  job  creation  and  participation  in  the 
job market.  In recent years Austria has made 
some  progress  by  shifting  towards  tax  types 
that  are  more  supportive  of  sustainable 
growth.  For  example, 
in  2022  Austria 
introduced a national CO2 price for fossil fuel 
used in sectors not yet covered by the EU ETS, 
in advance of the introduction of ETS2. Despite 
these  efforts,  environmental 
taxes  and 
property  taxes  remain  underused.  Austria  has 
a relatively low VAT compliance gap (9). As part 
new 
of 
government  has 
introduced  a  series  of 
taxation  measures.  These  include  an  increase 
of  the  bank levy,  a  five-year  extension  of  the 
energy crisis contribution by energy producers, 
the removal of VAT exemptions for small solar 
panel systems and the exemption from motor 
vehicle  insurance  tax  for  electric  vehicles, 
increases of tobacco tax and gambling tax and 
an extension of the increase in the tax rate for 
high income earners. 

consolidation 

effort, 

the 

its 

Relatively  low  statutory  and  effective 
retirement  ages  contribute  to  significant 
pension expenditure.  Pension  expenditure is 
expected  to  increase  from  14.2%  of  GDP  in 
2024  to  15%  of  GDP  in  2030,  before  falling 
back  to  14%  of  GDP  in  the  long  term, 
significantly above the EU average (10). Overall, 
Austria  is  still  lagging  behind  the  EU  average 
regarding  the  effective  retirement  age  (62.6 
for men and 60.5 for women compared to an 
EU  average  of  63  for  men  and  62.7  for 
women in 2022) (11). Some significant reforms 
were  introduced  between  2000  and  2012  to 
increase  the  effective  retirement  age,  while  a 
reform  in  1992  contributed  to  raising  the 
female  statutory 
to  65 
gradually  between  2024  and  2033.  However, 

retirement  age 

(9)  The VAT compliance gap is the estimated difference 
between potential VAT revenue under full compliance 
and the actual amount collected by tax authorities. 

(10)  European Commission, 2024, Ageing Report 2024. See 

also Annex 1. 

(11)  ibid. 

 
 
 
increased  above 

more  recent  pension  measures  have  mostly 
been  one-offs  of  limited  scope,  and  pensions 
levels  have  been 
the 
reference  value  mandated  by  the  law.  The 
government  has  announced  its  intention  to 
tighten  access  to  the  ‘corridor  pension’  early 
retirement  scheme,  which  would  bring  some 
savings  by  contributing  to 
increasing  the 
effective retirement age. 

plan  (RRP)  also includes  a  series  of measures 
promoting  primary  healthcare  and  target-
based governance in long-term care. 

Declining productivity growth, 
energy costs and regulatory 
barriers are significant challenges 

reform  aimed 

Demographic ageing also poses a growing 
challenge  for  other  social  protection 
pillars. Austria’s public healthcare expenditure 
is  projected  to  increase  by  1.2  pps  of  GDP 
from 7.7% in 2024 to 8.9% in 2070 – double 
the EU average increase of 0.6 pps. Long-term 
care expenditure is projected to increase from 
1.6%  to  3.1%  of  GDP  in  2070(12).  The  2023 
healthcare 
to  strengthen 
primary  care,  health  promotion  and  disease 
prevention,  to  expand  digital  health  services, 
and  to  pursue  structural  reforms 
in  the 
hospital  sector.  However,  a  clear  strategy  on 
how  to  ensure  that  the  increased  availability 
of  primary  care  services  does  not  duplicate 
existing specialist care services and capacities 
is  still 
infrastructure 
continues  to  be  heavily  relied  upon,  despite 
efforts to shift towards more sustainable care 
models.  Furthermore,  regions  and  the  social 
insurance frequently exceed the agreed annual 
spending  ceilings,  limiting  their  effectiveness. 
Regulatory  measures  could  help  to  reduce 
hospital  use  and  drive  structural  changes  by 
aligning 
spending 
responsibilities. 

  Hospital 

financing 

lacking. 

and 

long-term  care 

Long-term care is a pressing priority.  The 
recent 
reform  packages 
improved staff training and working conditions 
in  the  care  sector,  while  increasing  financial 
support for caregiving relatives and for live-in 
care  services.  However,  fiscal  sustainability 
challenges were not addressed. A large part of 
public  expenditure  covers  in-kind  services  in 
institutions,  whereas  home-care  services 
would  be  more  cost-effective.  Furthermore, 
asset-testing  in  all  care  settings  could  bring 
significant savings. The recovery and resilience 

having 

than  breakthrough 

Despite 
a  well-developed 
innovation  system,  Austria  struggles  to 
translate  new 
into  business 
ideas 
dynamism  and  productivity  growth, 
experiencing  a  notable  decline  in  total 
factor  productivity  growth  since  2008. 
The 
innovation  system  tends  to  support 
incremental  innovation  in  established  sectors, 
innovation  and 
rather 
emerging  technologies,  and  the  economy 
struggles  to  generate  higher  business  growth 
and productivity. A shortage of venture capital 
innovative  firms,  and  the 
hinders  young 
regulatory  environment  poses  a  challenge, 
with 
dampening 
competition, 
in  professional 
services  (13).  To  boost  high-impact  innovation, 
further efforts are needed to support top-level 
research in emerging fields. 

in  particular 

bureaucratic 

hurdles 

sectors 

industries 

far-reaching 

implications 
its  high 

The significant increases in energy prices 
have 
for 
competitiveness.  Given 
import 
dependence  on  fossil  fuels,  Austria  has 
experienced substantial energy price increases, 
leading  to  a  sharp  rise  in  unit  energy  costs 
in  2021-2022.  The 
across  all 
been 
have 
energy-intensive 
particularly 
impacted.  After  the  expiry  of 
emergency measures to cushion the effects of 
price spikes, attention needs to move towards 
measures  for  sustainable  price  reductions 
covering  all  cost  components.  Additional 
national  measures  to  decouple  electricity  and 
gas  prices  such  as  expanding  storage, 
improving  flexibility  of  the  energy  system  or 
incentivising  power  purchase  agreements, 
would also help to alleviate price pressures. 

(12)  European Commission, 2024, Ageing Report 2024. See 

(13)  OECD 2025: Services Trade Restrictiveness Index: 

also Annex 1. 

Austria (10 Feb 2025). 

5 

 
 
 
Box 1: 

UN Sustainable Development Goals (SDGs) 

Austria  performs  well  and  continues  to  improve  on  SDGs  related  to  productivity  and 
macroeconomic  stability 
improving  on 
competitiveness-related  indicators  that  form  part  of  quality  education  (SDG 4).  The 
picture  on  SDGs  related  to  fairness  (SDGs 1,  3,  4,  5,  7,  8,  10)  is  more  mixed  than 
previously,  and  Austria  needs  to  catch  up  on  partnerships  for the  goals  (SDG 17)  (see 
Annex 15). 

(SDGs 8,  9  and  16). 

likewise 

is 

It 

The 

is 
part 

in  green 

subsidies  and 

Cost-effective solutions are necessary to 
achieve  decarbonisation. 
strong 
tax 
increase 
exemptions over the past few years has been 
effective  at  reducing  greenhouse  gas  (GHG) 
increasingly  difficult  to 
emissions  but 
budget 
ongoing 
sustain.  As 
consolidation  efforts, 
to 
is 
evaluate and reconsider the cost-effectiveness 
of  subsidies  and  to  shift  to  less  costly,  more 
long-term  alternatives,  such  as  the  phase-out 
of  fossil  fuel  subsidies,  use  of  regulation  and 
increased incentives for private investment. At 
the  same  time,  it  will  be  paramount  to 
maintain  the  high  ambitions  and  pace  of  the 
decarbonisation effort. 

important 

of 
it 

The  labour  market  is  constrained  by 
structural  weaknesses,  such  as  skills 
shortages,  low  working  hours  and  a 
shrinking working-age population. In 2023, 
more than half of Austrian small and medium-
sized  enterprises 
lack  of 
adequate  skills  within  the  workforce  as  a  key 
In 
constraint  for  business  activities 
addition,  despite  the  ongoing  recession,  the 
vacancy  rate  remains  the  third  highest  in  the 
EU at 3.6% (EU average 2.9%) indicating that 
labour supply remains a bottleneck for growth. 

identified 

(14). 

the 

(14)  European Commission, Flash Eurobarometer 529 
, 2023 

6 

 
 
 
 
Box 2: 

Barriers to private and public investment 

Amid  difficult  economic  conditions,  firms  tend  to  prioritise  replacement  investment, 
preserving existing production capacity rather than investing in expansion. 

According  to  reports  by  Austria’s  productivity  board (15)  and  the  European  Investment 
Bank (EIB) (16), the most important factors slowing private investments are: 

•  Extensive  bureaucracy.  A  complex,  partly  fragmented  regulatory  landscape,  long 
permitting  and  investment  approval  procedures  put  a  strain  on  both  public  and 
private investment.  

•  Lack  of  skilled  labour.  Well  over  80%  of  Austrian  companies  report  a  lack  of 

skilled labour as an obstacle to investment.   

•  Limited  access  to  risk  financing.  Despite  publicly  funded  schemes,  an 
underdeveloped private equity and venture capital market is not able to cover all the 
financing needs of innovative fast-growing firms.  

•  High production costs. Energy costs for industrial end-users above the EU average 

(17) and high unit labour costs place a significant financial burden on firms. 

Barriers  to  public  investment  mainly  stem  from  Austria’s  limited  government 
budget. Fiscal consolidation needs limit the government’s financial resources that could 
be  used  to  stimulate  economic  growth  and  invested  in  infrastructure  needs  for  the 
green  and  digital  transition.  The  implementation  of  Austria’s  RRP  is  well  underway.  At 
present, Austria has fulfilled 25% of the milestones and targets in its RRP.   

It remains important to accelerate the implementation of cohesion policy programmes. 
The mid-term review offers opportunities to speed up  progress and better address EU 
strategic priorities related to competitiveness, defence, housing, water resilience and the 
energy  transition.  While  Austria  has  leveraged  Strategic  Technologies  for  Europe 
Platform  to  reallocate  some  Cohesion  Policy  resources  towards  this  priority,  it  can 
further support the development or manufacturing of critical technologies in the areas 
of digital and deep tech, clean and resource efficient technologies, and biotechnologies. 

(15) Austrian Productivity Board, (2024), Annual productivity 

report 2024. 

(16) EIB (2025), EIB Investment Survey 2024 Country 

Overview: Austria. 

(17)  European Commission (2025), Study on energy prices 
and costs – Evaluating impacts on households and 
industry – 2024 edition, 

7 

 
 
 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

Enhancing innovation and risk 
financing 

Austria  performs  significantly  above  the 
EU  average  in  R&D  expenditure  in  the 
business  and  public  sectors.  Austria  has  a 
well-developed  innovation  system  that  relies 
on  a  solid  public  research  base  and  a 
functioning 
collaboration, 
science-business 
with a high number of public-private scientific 
co-publications.  In  2024,  Austrian  expenditure 
on R&D in the public sector was 141% of the 
EU  average,  while  in  the  business  sector  its 
the  EU 
expenditure  stood  at  150%  of 
average (18).  In  2023,  R&D  spending  was  the 
third  highest  in  Europe  at  3.26%  of  GDP, 
benefiting  from  strong  R&D  expenditure  by 
enterprises (2.27% of GDP vs the EU  average 
of  1.47%)  (19).  However,  there  are  marked 
regional  differences,  with  Styria  standing  out 
at  5.2%  of  regional  GDP,  whereas  R&D 
spending  in  the  federal  states  of  Vorarlberg, 
Lower  Austria,  Salzburg  and  Burgenland  was 
well below the EU-27 average of 2.3% (2022). 
Most  spending  in  Austria  is  directed  towards 
applied  research  with  only  19.1%  going 
towards  basic  research (20).  While  patenting 
activity  remains  significant, 
it  has  been 
steadily  weakening  over  the  past  decade  (3). 
Austrian  universities  do  not  achieve  top 
rankings in international comparisons. 

(18) 

European Commission, 2025: European 

Innovation Scoreboard 2024: Austria. 

(19)  Eurostat, 2025: Research and development expenditure, 

by sectors of performance 

(20) 

Statistik Austria (2021, Forschung und 

experimentelle Entwicklung 2021 
https://www.statistik.at/fileadmin/user_upload/FuE2021.p
df  

in 

translate 

the  EU  average 

In  2022,  employment 

the  EU,  EUR 1.27  billion 

At  the  same  time,  new  ideas  do  not 
necessarily 
into  business 
dynamism  and  productivity  growth. 
Austria’s  strong  public  support  for  innovation, 
mainly  through  R&D  tax  incentives  (fourth 
highest 
in 
2023 (21)),  tends  to  focus  on  incremental 
innovation  in  long-established  medium-high 
in 
tech  sectors. 
(39.8%)  was 
knowledge-intensive  services 
slightly  below 
(40.8%). 
Domestic  value  added  in  the  exports  of  high 
and  medium-tech  manufacturing  and  of 
knowledge-intensive  services  also  remains 
behind  the  EU’s  innovation  leaders (22).  To 
boost  high-impact  innovation,  further  efforts 
could  be  considered  to  support  top-level 
research  in  emerging  fields  and  breakthrough 
innovation.  In  this  context,  the  ‘excellence 
programme 
initiative’  and 
(Competence 
Excellent 
Technologies)  are  useful  initiatives,  focusing 
on  application-oriented  cutting-edge  research 
transfer  of  new 
and  supporting  direct 
knowledge  into  market-ready  products  and 
services.  2024  saw  the  launch  of  a  new 
excellence  centre  (Battery4Life)  targeting  e-
mobility technologies. 

the  COMET 
for 
Centres 

A  more  systematic  review  of  existing 
support schemes could help identify gaps 
and  reduce  overlaps  in  the  innovation 
system.  To  this  end,  the  new  government 
programme  contains  several  measures  to 
increase  the  impact  of  innovation  support 
schemes for businesses and to focus more on 
key 
including  digitalisation, 
artificial intelligence and quantum technology. 
A  new  taskforce  on  subsidy  efficiency  will 

technologies, 

(21) 

Austrian Federal Ministry of Finance, 2024: 

Förderungsbericht 2023. 

(22) 

European Commission, 2024: Innovation Output 

Indicator 2023. 

8 

 
 
 
 
cloud 

adoption, 

gigabit  infrastructure  risks  slowing  Austria’s 
transformation,  affecting  business 
digital 
digitalisation, 
artificial 
intelligence  deployment  and  digital  public 
services  uptake.  Austria  would  benefit  from 
sustaining its deployment efforts to continue a 
positive  trajectory.  The  country  has  recorded 
one of the highest VHCN coverage increases in 
the EU in recent years and is implementing the 
Broadband  Austria  2030 
(partly 
funded by the RRF) with the goal of achieving 
100% VHCN coverage by 2030. 

initiative 

for 

ideas 

Low  business  dynamism  makes  it  more 
difficult 
with 
new 
entrepreneurial  potential  to  emerge  and 
grow.  The  share  of  new  business  formation 
stood at 6% in 2022, thus 2 pps below the EU 
average.  The  share  of  high-growth  firms 
stands  at  7.8%  relative  to  the  EU  average  of 
9.2%.  Providing  better  support  to  start  a 
business,  also  by  promoting 
spin-offs, 
incubators  and  accelerators,  mentorship, 
networking  opportunities  and  initial  resources 
to  start-ups,  could  help  develop  a  more 
dynamic  innovation  environment.  Moreover, 
there 
innovation 
activities between large companies and SMEs, 
highlighting 
tailor  support 
measures to the needs of fast-growing SMEs. 
Since  2024,  a  new  flexible  company  form, 
been 
‘Flexible 
available,  offering  founders  and  start-ups  a 
simplified  process  for  issuing  shares  and  for 
share ownerships, with around 800 such firms 
founded in the first year (24). 

is  a  noticeable  gap 

Kapitalgesellschaft’, 

the  need 

has 

to 

in 

to  meet  all 

Easier  access  to  risk  capital  could  boost 
business  growth  and  productivity.  The 
is  not  yet 
local  venture  capital  market 
sufficiently  developed 
the 
financing  needs  of  innovative  fast-growing 
firms. This is exacerbated by reliance on bank 
loans,  which  has  led  to  low  capitalisation  of 
domestic companies compared to international 
peers.  Easier  access  to  risk  capital  can  help 
more young companies grow, but also achieve 
higher  multi-factor  productivity  gains, 
in 
particular  of  companies  that  operate  below 

(24)  Austrian Federal Ministry of Economy, Energy and 

Tourism, 2025: Flexible Kapitalgesellschaft (FlexCo) hat 
sich erfolgreich etabliert 

evaluate  and  optimise  all  existing  schemes 
and  develop  a  comprehensive  strategy  for 
efficient  allocation  of  subsidies.  To  reduce 
bureaucratic  hurdles,  the  government  also 
plans  to  create  a  new  one-stop-shop  for  all 
subsidies targeting industrial transformation. 

Graph 2.1: Leveraging R&D spending to reap 
higher economic benefits from innovation 

Source: Eurostat, Innovation Output Indicators(23) 

in 

rural  areas, 

Slow  adoption  of  advanced  digital 
technologies  among  businesses  and 
coverage, 
insufficient 
broadband 
particularly 
further 
constrain  productivity  growth.  While 
companies  demonstrate  strong  uptake  of 
artificial  intelligence,  they  lag  behind  the  EU 
average  in  the  adoption  of  cloud  and  data 
such  as 
analytics.  Targeted  measures, 
financial 
data 
incentives, 
infrastructure  support,  and  digital  skills 
development,  could  enhance  adoption  – 
especially  among  small  and  medium-sized 
innovative  start-
enterprises 
ups/scale-ups.  On 
infrastructure, 
Austria’s  very  high-capacity  network  (VHCN) 
coverage  is  also  below  the  EU  average  (68% 
vs the EU average of 79% in 2024), being one 
of  the  weakest  performers  in  rural  coverage 
(36%  vs  the  EU  average  of  56%).  Limited 

(SMEs)  and 

digital 

cloud 

and 

(23)  The Innovation Output Indicator (IOI) measure countries’ 
capacity to derive economic benefits from innovation. 
Among other things, it tracks the extent to which 
innovative ideas reach the market, boost technological 
capability and the number of knowledge-intensive jobs. 

9 

020406080100120140160180200 -  0.50  1.00  1.50  2.00  2.50  3.00  3.50  4.00CHSEDEFIBENLDKATFREU27Average R&D expenditure 2021-2023 (% of GDP)Innovation output indicator 2022 (normalized to EU27 average from2012) 
   
 
 
low 

(0.6%). 

venture 

institutional 

the  productivity  frontier (25)(26).  The  average 
value of private equity investment went up to 
0.2%  of  GDP  in  2021-2023  from  0.15%  in 
2015-2020,  but  it  is  still  well  below  the  EU 
capital, 
For 
average 
investments  increased  to  0.08%  of  GDP  in 
2021-2023,  in  line  with  Austria’s  EU  peers 
(Annex  5).  Although  a  wide  variety  of  funding 
instruments  are  available,  risk  financing  for 
start-ups  and  scale-ups  can  be  further 
improved. Limited equity funding is partly due 
to 
investor  participation, 
hindering the market’s ability to support young 
businesses  in  later  stages.  Removing  barriers, 
such  as  unequal  tax  treatment  of  equity  and 
debt,  could  help  pension  and  insurance  funds 
play  a  bigger  role  in  financing  fast-growing 
companies.  To  this  end,  the  new  government 
plans  to  establish  a  new  fund  of  funds  (‘rot-
weiß-roter  Dachfonds’),  to  further  develop the 
Act 
Venture 
(Wagniskapitalfondsgesetz), and to extend the 
Future 
Zukunft 
Fund 
Österreich’)  until  2030,  with  a  budget 
allocation of EUR 200 million per year. 

(‘Fonds 

Austria 

Capital 

Funds 

Reducing regulatory barriers and 
red tape to facilitate business 
investment 

investment (27).  The 

There  is  scope  to  significantly  simplify 
regulation  and  reduce  the  administrative 
burden  for  businesses.  The  complexity  of 
regulations is reported to be a barrier to long-
industrial  code 
term 
regulates  access  to  many  professions. 
It 
primarily  ensures  quality  standards  and 
consumer  protection,  but 
limits 
competition  by  putting  up  barriers  to  entry, 
especially  for  professionals  from  abroad.  The 
industrial  codes  are  laid  down  at  the  Länder 

it  also 

the 

to  making 

level, but their rules sometimes diverge, which 
contributes 
regulatory 
environment  more  complex.  Moreover,  Austria 
has  nine  separate  building  codes,  together 
with  a  host  of  different  and  sometimes 
contradictory  building  standards,  which  make 
construction and especially renovation projects 
inefficient. Difficulties in construction are also 
labour 
reflected 
declining 
productivity  growth 
the  sector  since 
2008 (28). 

strongly 
in 

in 

Austria  is  among  the  EU  Member  States 
with the highest degree of restrictiveness 
in terms of trade in services. This limits the 
movement  of  professionals  from  abroad  to 
Austria.  Labour  market  tests  are  widely 
applied,  even  for  intra-corporate  transferees, 
and  foreign  engineering  professionals  are 
required to pass local examinations to obtain a 
licence  to  practice (29).  In  addition,  in  Austria’s 
retail  sector,  market  entry  is  already  difficult 
due  to  high  investment  costs  as  well  as 
oversaturation  and  is  further  hindered  by 
stringent establishment rules (30). The resulting 
lack  of  competition  contributes  to  high  prices 
for  consumers.  Austria’s  food  prices,  for 
instance, are the fifth highest in the EU (31). 

room 

considerable 

Some  key  single  market  indicators  also 
leave 
for 
improvement. The proportion of EU directives 
not  transposed  into  Austrian  law  in  a  timely 
manner  and  the  proportion  of  all  directives 
transposed 
incorrectly  are  above  the  EU 
averages.  Austria’s  number  of  infringement 
cases  is  also  higher  than  the  EU  average 
(although they take a bit less time) (Annex 4). 

industrial 
Permitting  procedures 
projects 
involving  an  environmental 
impact assessment usually require 22-23 

for 

(25)  OECD, 2024: Economic Surveys – Austria (Jul. 2024). 

(26)  "productivity frontier" refers to the maximum 

productivity level achievable by companies in a given 
industry or economy, typically represented by the most 
efficient and innovative firms 

(28) 

Eurostat, 2025: Labour productivity and unit 

labour costs by industry (nama_10_lp_a21). 

(29)  OECD 2025: Services Trade Restrictiveness Index: 

Austria (10 Feb 2025). 

(30)  European Commission, 2022, Retail restrictiveness 

indicator (2022 update). 

(27) 

European Investment Bank, 2025: EIB Investment 

(31) 

Eurostat, 2024: Comparative price levels for food, 

Survey 2024. 

beverages and tobacco - Statistics Explained. 

10 

 
 
 
business-friendly 
Germany or France (34). 

administration 

than 

months  from  the  date  of  application  (32). 
Limited  digitalisation,  with  communication 
often  relying  on  traditional  methods  and 
physical  document  submission,  play  a  part  in 
protracting  procedures  (33).  The  authorities  in 
charge  of  these  permits  vary  from  local  to 
Länder  level,  with  some  not  having  sufficient 
capacity  to  efficiently  manage  the  volume  of 
procedures.  Permitting  could  be  accelerated, 
including  by  creating  more  options  for  early 
commencement  of  preparatory  construction 
of 
works, 
project 
non-essential 
opponents 
documents to be submitted at a later stage. 

simplified 
or 

hearings 

allowing 

of 

use 

regulatory 

The 
impact 
assessments  (RIAs) for  primary laws and 
subordinate  regulations  is  above  the  EU 
average.  However,  there are  no  recent  cases 
in  which  existing  regulations  have  been 
consolidated (Annex 6). A more systematic use 
of  mechanisms  and  tools  to  review,  recast 
and,  where  possible, 
ineffective 
regulations  could  help  make  it  less  costly  for 
firms  to  comply  with  the  regulations.  This 
would  make  Austria’s  regulatory  framework 
more business friendly. 

repeal 

tax 

the 

industrial 

Austria  is  taking  action  to  tackle  the 
regulatory burden. The new government has 
proposed 
code  be 
that 
registration  be 
modernised  and  business 
simplified  and  digitalised.  Furthermore,  the 
number of small businesses benefiting from a 
simplified 
the 
increase. 
‘Basispauschalierung’, 
Finally,  the  new  government  has  appointed  a 
State  Secretary  for  De-bureaucratisation  and 
Innovation. 
burden 
the  application  of  EU 
emanating 
regulations  can  differ  depending  on  the 
Member  State.  A  study  comparing the  cost  to 
business  from  the  same  EU  regulations  in 
different  Member  States  has  shown  that 
Austria  generally  performs  better  in  terms  of 

scheme, 
to 

The 
from 

bureaucratic 

is  set 

(32) 

Including operating permits, building permits in 

line with spatial planning requirements, permits based on 
emissions of pollutants and noise and water use permits. 

(33) 

European Commission, 2025: Net-zero 
manufacturing industry landscape across the Member 
States (Jan. 2025). 

(34) 

Prognos, 2023: Bureaucracy costs in a European 

comparison | Prognos. 

11 

 
 
 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

Improving energy affordability and 
reinforcing the electricity grid  

High  energy  prices  affect  Austria’s 
competitiveness.  Austria  has  suffered  from 
significant  energy  price  increases  lately,  with 
the electricity price for large consumers being 
the  seventh  highest  in  the  EU  in  2023  (see 
Annex  7).  Austria  relies  for  65%  of  its  energy 
needs on imports, particularly oil and gas. Unit 
energy  costs  rose  sharply  for  all  industries  in 
2021-2022.  This  had  a  particular  impact  on 
energy-intensive  sectors,  which  accounted  for 
5.2% of the gross value added in the national 
economy  in  2022.  At  the  same  time,  energy 
intensity (35) is decreasing only slowly. The rise 
in  costs  has  affected  price  competitiveness. 
This  has  been  especially  the  case  in  the 
automotive 
the  non-metallic 
in 
minerals  sector  and  in  other  manufacturing 
including  the  rubber  and  plastic 
sectors, 
industry.  High energy use is concentrated in a 
few  hundred  companies,  but  they  play  an 
important  role  in  the  overall  economy (36).  A 
number  of  support  measures,  such  as  the 
energy  cost  subsidy  (Energiekostenzuschuß), 
were  in  place  to  compensate  companies  for 
the  strong  energy  price  increases.  The  new 
Austrian government has decided to set up an 
expert  group 
for 
sustainably  reducing  energy  prices,  including 
for energy-intensive industry. 

to  present  proposals 

sector, 

in 

over 

existing 

terms  of 

The  expansion  of  the  power  grid  poses 
cost  challenges  for  both  grid  operators 
and users. 2024 was another record year for 
Austria 
renewable  energy 
generation, with 87 % of electricity generated 
from renewables (see Annex 8) and continued 
strong  growth  of  photovoltaics.  Furthermore, 
Austria  has  set  more  ambitious  targets  for 
expanding  renewables  in  its  final  updated 
national  energy  and  climate  plan  (NECP)  of 
December  2024 (37).  This  requires  both  more 
investments  and  faster  permitting  for  the 
upgrading  and  expansion  of  grids.  Enhancing 
trading 
cross-border 
infrastructures  remains  a  challenge.  It  would 
therefore  be  beneficial 
to  work  with 
neighbouring  countries  to  maximise  cross-
zonal  electricity  trading  over  existing  cross-
border  infrastructures.  In  total,  an  estimated 
EUR 53 billion of investments may be required 
in  Austria  by  2040 (38).  The  cost  of  network 
expansion  is  borne  by  the  network  users. 
Network  charges  make  up  to  24%  of  the 
electricity  price  for  households  and  14%  for 
industry. Network charges rose by an average 
of  19%  in  January  2025  to  finance  ongoing 
things (39).  To 
investments,  among  other 
prevent  grid  investments  from  driving  prices 
even  higher,  rapid  progress  on  regulatory 
measures,  such  as  reform  of  the  grid  fee 
structure,  would  be  beneficial.  Alternative 
financing options are also worth exploring (see 
Annex 8).  

Following  first  positive  steps  with  the 
impact 
reform  of  the  environmental 
further 
assessment, 

progress 

in 

(35)  Energy intensity is the ratio between energy 

consumption and economic or physical output. IATE 
European Union terminology. 

(36)  Reinstaller A., Sellner R, (OeNB) (2023), Industrial 

energy prices and the competitiveness of the Austrian 
business sector, Report 03/2024, Büro des 
Produktivitätsrates, Report 03/2024.  

(37)  2024 Bundesministerium für Klimaschutz, Umwelt, 
Energie, Mobilität, Innovation und Technologie: 
Integrierter Nationaler Energie- und Klimaplan für 
Österreich. 

(38)  Frontier Economics: Infrasturkturfonds als Baustein für 

den Stromnetzausbau, 2024. 

(39) E-Control, 2025: Error! Hyperlink reference not valid.. 

12 

 
 
 
 
accelerating  permitting  and  eliminating 
bottlenecks  has  stalled.    The  transposition 
of  revised  EU  permitting  rules  into  Austrian 
law  has  been  delayed. 
In  addition  to 
understaffing,  administrative  and  process 
bottlenecks persist, such as regulatory hurdles 
blocking  experts  from  working  in  a  federal 
province other than the one in which they are 
accredited.  

Diversification  of  gas  supplies  has  been 
achieved  but  expanding  interconnection 
capacity  with  neighbouring  countries 
remains  a  matter  of  urgency 
to 
guarantee  energy  security.  Russian  gas 
imports fell strongly in November 2024, when 
Gazprom terminated its supplies to OMV. Since 
the  beginning  of  January  2025,  they  have 
ended  completely  because  the  transit  of  gas 
through  Ukraine  has  been  stopped.  Austria 
secured  gas  imports  from  Norway,  Germany 
and Italy, ensuring a smooth transition. In view 
of  the  need  to  diversify  gas  supplies  and 
guarantee  security  of  supply,  in  2024  the 
government  announced  targeted  investments 
to  cover  the  increased  capacity  needs  of  gas 
infrastructure 
from 
neighbouring  countries,  such  as  Germany. 
Specifically, this concerns the expansion of the 
West-Austria-Gas  pipeline  (WAG  Loop  1).  The 
completion 
this 
infrastructure project is 2027. Fast and steady 
progress in its implementation would therefore 
be of benefit. 

imports  of  gas 

envisaged 

date 

for 

for 

Speeding up decarbonisation of 
industry by swiftly implementing 
additional measures and 
expanding net-zero industries 

efforts, 

to  maintain 
given 

its 
Austria 
needs 
decarbonisation 
its 
national  commitment  to  reach  climate 
neutrality by 2040. In 2023, greenhouse gas 
emissions fell by  6.5% and a smaller but still 
significant  reduction  of  3.7%  is  expected  to 
have  occurred  in  2024.  While  part  of  this 
decrease  can  be  attributed  to  the  ongoing 
recession,  climate  mitigation  policies  and  in 
particular the expansion of renewables are the 

main  drivers  of  Austria’s  decarbonisation (40). 
However,  financial  constraints  have  recently 
prompted  a  reassessment  of  climate  support 
measures.  Several  green  subsidies,  including 
tax  exemptions  for  the  purchase  of  small 
photovoltaic  systems  and  the  insurance  of 
electric  cars,  were  abolished  at  the  beginning 
of  2025 (41).  Austria  would  benefit  from 
the  phase-out  of  fossil-fuel 
accelerating 
subsidies. As part of its 2024 NECP, Austria set 
itself the  objective  of  achieving  a greenhouse 
gas  reduction  of  at  least  2  million  tonnes  of 
CO2-equivalent per year by 2030, by gradually 
eliminating  counterproductive  incentives  and 
subsidies.  By  focusing  on  the  phasing  out  of 
environmentally  harmful 
tax  exemptions, 
Austria can both promote decarbonisation and 
create more fiscal space. (see Annex 8). 

industry 

The  decarbonisation  of 
is 
progressing  only  slowly.  Manufacturing  is 
characterised  by  high  energy  intensity  and 
produced  35%  of  Austria’s  total  greenhouse 
gas  emissions  in  2022.  While  the  sector  has 
improved 
its  energy  efficiency,  emission 
reductions continue to lag significantly behind 
those of other Member States. Between 2017 
and  2022,  the  greenhouse  gas  emissions 
intensity  of  energy-related  emissions  declined 
by 9% in Austria, compared to the EU average 
of  16%.  Moreover,  Austria’s  large  automotive 
to  stay 
supplier 
competitive  amid  the  ongoing  shift  to  electric 
vehicles.  Weak  demand  and  difficulties  in  the 
German  export  market  negatively  impact  this 
sector  and  hamper  Austria’s  transition  to 
sustainable transport (see Annex 7). 

is  struggling 

industry 

reduction 

Additional  measures  need  to  be  fully 
implemented  so  that  Austria  reaches  its 
emission 
the 
transport,  buildings  and  agriculture 
sectors.    In  2023,  emissions  from  buildings 
decreased  by  17.8%  whereas 
transport 
emissions  only  saw  a  reduction  of  4.3% 

targets 

in 

(40)  20 January 2025, Rückgang der Treibhausgas-

Emissionen 2023 um 6,5%. Umweltbundesamt. News | 
Treibhausgas-Bilanz 2023 | Umweltbundesamt. 

(41)  6 March 2025, Parlament Österreich, 

Parlamentskorrespondenz Nr. 110. Budgetausschuss 
gibt grünes Licht für Maßnahmen zur Budgetsanierung 
(PK0110/06.03.2025) | Parlament Österreich 

13 

 
 
 
still 

could 

step  up 

compared to the previous year (42). This means 
that  Austria  performs  slightly  above  the  EU-
average  but 
its 
decarbonisation  efforts.  The  2024  NECP 
proposes  additional  measures  that  will  allow 
Austria  to  reach  its  effort-sharing  targets.  It 
would  be  of  considerable  benefit  if  Austria 
these  additional  measures 
implemented 
from 
fully  while 
swiftly  and 
introducing 
fuel 
new 
subsidies (43). 

refraining 
fossil 

harmful 

from 

digitalising 

benefit 
and 

Austria’s net-zero industry is competitive 
further 
but  would 
streamlining 
of 
permitting  procedures  and 
from  a 
dedicated  strategy  for  expansion  and 
export.  2-4%  of  EU’s  capacity  for  solar 
components  is  manufactured  in  Austria  and 
the  recent  introduction  of  a  ‘Made-in-Europe’ 
bonus is expected to boost  domestic demand. 
The  production  of  wind  turbine  components 
amounts  to  3%  of  total  EU  production,  while 
batteries  and  storage  technologies  only  make 
up  a  negligible  amount.  Both  industries  have 
potential for further growth (see Annex 7).  

Compared  to  other  Member  States, 
Austria  has  a  high  share  of  green 
jobs (44),  but  the  availability  of  skilled 
labour  still  constitutes  a  bottleneck  for 
its  net-zero  industry (45).  To  remedy  this, 
Austria  is  investing  EUR 10  million  between 
April 2022  and  December 2025  to  upskill 
1 000 people with qualifications needed in the 
environmental  sector  as  part  of  its  Just 
Transition Action Plan (46). However, there is no 

(42)  European Commission, January 2025, Climate Action 
Progress Report 2024. Country Profile Austria.,, p. 6. 

(43)  The coalition programme for 2025-2029 announced a 
tax exemption for N1-vehicles (light commercial trucks). 
This new fossil fuel subsidy risks being 
counterproductive for Austria’s emission reduction and 
budget consolidation objectives.   

(44)  European Commission, July 2024, Assessing Green Job 
Dynamics in the EU: A Comparison of Alternative 
Measures, p. 16, EGSS-based methodology.  

(45)  European Commission: Directorate-General for Energy 
and ECORYS, 2025, The net-zero manufacturing 
industry landscape across Member States. Annex 2, 
Country fiches, p.10. 

(46)  Ibid. p. 9 

dedicated  strategy  to  address  potential  job 
losses in carbon-intensive industries (47). Given 
the  unequal  distribution  of  the  costs  and 
benefits  of  the  green  transition,  measures 
aimed  at  supporting  vulnerable  professions, 
sectors  and  regions  can  also  improve  the 
perception  and  popular  acceptance  of  large-
scale transformations.   

in 

and 

and 
to 

foster 
develop 

Austria is among the EU’s top investors in 
eco-innovation (48) 
actively 
participates 
important  projects  of 
common  European  interest  (IPCEIs)  on 
microelectronics, batteries and  hydrogen. 
The  hydrogen  strategy,  which  forms  part  of 
the Austrian recovery and resilience plan (RRP), 
aims to establish 1 GW of electrolysis capacity 
by  2030 (49) 
international 
partnerships 
hydrogen 
infrastructure.  With  electrolyser  capacity  at 
18.2 MW  as  of  February 2025 (50),  the  gap  to 
the  1 GW  goal  is  substantial.  High  electricity 
prices and  the increasing cost of electrolysers 
have  been  a  drag  on  expanding  capacity. 
Austria  participated  in  the  Hy2Tech  IPCEI, 
focusing  on  innovative  project  support  along 
the  value  chain,  and  in  the  Hy2Use  IPCEI, 
which  focuses  on  industrial  decarbonisation. 
The  two  IPCEIs  are  included  in  Austria’s  RRP, 
receiving  funding  of  EUR  125  million.  In 
addition,  Austria  participated  in  the  European 
Hydrogen  Bank’s  second  auction-as-a-service 
scheme,  committing  EUR 200  million  from  its 
national  budget,  with  a  maximum  capacity  of 
300 MW  of  production  to  be  supported  in  the 
renewable 
auction. 
energy  potential,  particularly  in  hydropower 
and  wind,  could  benefit  green  hydrogen 
production.  At  the  same  time,  Austria  lacks 
ideal  large-scale  renewable  energy  resources 

In  principle,  Austria’s 

(47)  Austria’s just transition plan identified 71 000 people 
working in carbon-intensive industries in Carinthia, 
Lower Austria, Upper Austria and Styria. FEPS, 2023, 
The Road to a Just Transition, p. 9. 

(48)  European Environment Agency, 2024, Eco-innovation 

index in Europe. 

(49)  According to the hydrogen strategy and assuming an 
operation of around 5 000 full-load hours per year, a 
1 GW electrolysis capacity can largely cover the current 
industrial demand for hydrogen in Austria. 

(50)  Hydrogen Partnership Austria, February 2025, 

Elektrolyseure in Österreich.  

14 

 
 
 
necessary for cheap electrolysis.  Thus, Austria 
aims to complement domestic production with 
cost-efficient 
the 
SouthH2Corridor.  

imports,  preferably  via 

Reducing waste production and 
adapting to increasingly common 
extreme weather events  

in 

Austria  produces  the  highest  amount  of 
waste  per  capita 
the  EU,  and 
sustaining  progress  in  circular  use  of 
material, resource productivity and waste 
management  will  be 
important.  The 
efficient  use  of  resources  is  key  to  ensuring 
competitiveness and open strategic autonomy, 
while minimising the environmental impact. In 
2022,  Austria  adopted  its  circular  economy 
strategy,  setting  the  target  of  reducing  its 
material  footprint  (raw  material  consumption) 
to  seven  tonnes  per  capita  per  year  by  2050. 
Key  measures  include  the  introduction  of  a 
deposit  return  system  for  single-use  plastic 
bottles and a repair bonus scheme, which aims 
to  prolong  the  use  of electrical  and electronic 
equipment  (both  measures  are  supported  by 
the  Recovery  and  Resilience  Facility).  Despite 
improvements  to  its  waste  management  and 
recycling systems, Austria produced 803 kg of 
waste per capita in 2022 compared to the EU 
average of 513 kg per capita. This is primarily 
driven by the largest waste categories, namely 
soils and mineral waste from construction and 
demolition.  Investments  in  circularity  have 
been 
lack  an  estimated 
EUR 750  million  per  year  to  unlock  Austria’s 
circular economy potential (see Annex 7).  

insufficient  and 

for 

Austria  is  facing  increasing  climate  and 
that  have 
environmental  challenges 
implications 
economic 
its 
competitiveness  and  the  population’s 
well-being.  With  a  near  2°C  increase  in 
average  annual  surface  temperature  since 
1880,  the  country  faces  heightened  climate 
risks  impacting  biodiversity.  Economic  losses 
amounted  to  EUR 14.7  billion  between  1980 
and  2023,  with  only  19%  of  these  losses 

events 

affected 

around  700 

extreme  weather 

being  insured (51).  The  heavy  rainfall  and 
flooding 
in  September  2024  caused  an 
estimated  damage  of  at  least  EUR 1.3  billion 
and 
companies. 
Budgetary  risks  are  expected  to  increase, 
driven  by  higher  costs  for  repairing  and 
maintaining  public  infrastructure,  as  well  as 
rising  healthcare  expenditure (52).  Climate-
are 
related 
aggravated  by  land  take  and  soil  sealing(53), 
which continue to occur at a very high rate in 
Austria.  Total  land  use  was  17.3%  of  the 
permanent  settlement  area,  52%  of  which  is 
sealed (54).  Further  restoration  measures  and 
changes  in  land  use  practices  will  benefit 
healthy  ecosystems  and  provide 
for  a 
significant economic value, with many sectors 
highly  dependent  on  ecosystem  services  (55). 
This  is  especially  the  case  for  Austria,  where 
the  overall  dependency  of  its  economy  on 
ecosystem  services  is  above  the  EU  average, 
with 46% of gross value added having a high 
direct  dependency  on  ecosystem  services.  
With the release of its third climate adaptation 
strategy  and  the  adoption  of  a  dedicated  soil 
strategy, 
these 
is 
challenges.  For  their  benefits  to  be  accrued, 
and  to  reduce  ecosystem  fragmentation,  and 
strengthen climate resilience, the measures in 
the 
full 
implementation,  including  mobilisation  of  the 
necessary investments. (see Annex 9). 

timely  and 

addressing 

strategy 

Austria 

require 

(51)  European Environment Agency, 2024, Economic losses 
from weather- and climate-related extremes in Europe. 

(52)  WIFO, 2024, Budgetäre Kosten und Risiken durch 
klimapolitisches Nicht-Handeln und Klimarisiken.  

(53)  Land take refers to the loss of natural and semi-natural 
land to artificial land development. Soil sealing is 
defined as the permanent covering of the soil surface 
with impermeable artificial materials leading to the 
non-reversible loss of soil. See IATE European Union 
terminology.  

(54)  Österreichische Raumordnungskonferenz (ÖROK) 2023: 

Flächeninanspruchnahme und Versiegelung in 
Österreich. 

(55)  An ecosystem service is a service provided by the 

natural environment that benefits people or society. See 
IATE European Union terminology. 

15 

 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

of  hours  worked  by  full-time  employees (57). 
This  has  been  influenced  by  labour  hoarding 
(58) and changes in working preferences in the 
workforce  post  COVID-19,  such  as  reduced 
overtime  work.  Meanwhile,  part-time  workers’ 
hours  have  remained  stable.  Second,  over the 
same  period,  the  share  of  part-time  work 
increased  by  2 pps,  with  a  significant  rise 
among  the  highly  educated  (see  Annex  10). 
This trend is partly due to high labour taxation, 
which discourages the shift from part-time to 
full-time  work,  contributing  to  a  scarcity  of 
skilled labour. 

Graph 4.1: Women’s part-time employment in 
percentage of full-time and reasons for part-
time work 

(1) 15-64 year-olds, 2024 
Source: Eurostat, lfsa_eppga and lfsa_epgar 

Boosting  full-time  employment  among 
women,  often  hindered  by  family  and 
care  responsibilities,  is  a  priority.  Though 
the  activity  and  employment  rates(59)  of 

(57)  minus 5.14% 2019-2023, (EU avg. -2.5%), see 

Eurostat; lfsa_epgaed. 

(58)  Labour hoarding refers to the practice of keeping more 

workers than currently needed.  

(59)  Activity Rate: Percentage of working-age population 
employed or seeking work. Employment Rate: 
Percentage of working-age population currently 
employed. 

Declining working hours, skills 
shortages and mismatches 

in 

by 

being 

affected 

including 

rates  were 

Widespread labour and skills shortages in 
key  sectors, 
ICT,  are  a 
challenge.  After  reaching  a  record  high  of 
5.3% in 2022, the job vacancy rate in industry, 
construction and services fell to 4.0% in 2024, 
which  is  still  among  the  highest  in  the  EU 
(average 2.4%).  Some 6 out  of 10 companies 
labour 
reported 
shortages (56).  This  is  driven  by  demographic 
change  and  the  restructuring  of  industries 
resulting  in  an  increasing  demand  for  new 
skills  for  the  green  and  digital  transitions. 
Vacancy 
in 
construction and services and particularly high 
in the metal industry as well as the IT and care 
sectors. This was in part driven by challenging 
working  conditions  in  some  of  these  sectors. 
Even  though  the  share  of  ICT  specialists  in 
total  employment  (5.3%  in  2023),  exceeded 
the EU average, acute skills shortages in the IT 
sector  hamper  Austria’s  innovative  capacity, 
particularly  in  the  rapidly  evolving  field  of  AI 
(see Annex 12). The expansion of digital and AI 
solutions,  along  with 
improved  access  to 
growth  financing  could  help  bridge  the  gap 
between high labour demand and the scarcity 
of skilled workers. 

relatively  higher 

The  number  of  hours  worked 
is 
decreasing  due  to  a  rise  in  part-time 
work  and  reduced  hours  by  full-time 
workers.  The  average  number  of  actual 
weekly  hours  worked  has  declined  over  the 
last  decade  by  2.2  hours  to  33.6  hours.  This 
decline can be attributed to two main factors. 
First, there has been a decrease in the number 

(56)  WKO (2024) Unternehmensbefragung zum Arbeits- und 

Fachkräftebedarf/-mangel – Arbeitskräfteradar,. 

16 

0102030405060ESFIFRSEIEEU-27LUITEADKBEDEATNLCare of adults with disabilities or childrenOther family reasonsOther personal reasonsEducation or trainingNo full-time job foundOwn illness or disabilityOther reasonsData excludedfor countries with women'spart-time work  below 20%  
 
 
  
 
women  are  high  and  increasing  in  absolute 
terms  (74.2%  and  73.9%  respectively 
in 
2024),  fewer  women  than  men  participate  in 
the  labour  market  and  more  than  half  of 
women  in  employment  are  working  part-time 
(at 61.4%, the second highest rate in the EU). 
Calculated in full-time equivalents, the gender 
employment  gap  was  19 pps  in  2023.  These 
disparities  result  in  an  above-average  gender 
pay  and  pension  gap.  Underlying  factors 
include the fact that women spend more hours 
than  men  providing  unpaid  care (60),  in  2024 
more than 40% of women cited care of adults 
with  disabilities  or  children  as  a  reason  for 
(61). 
working  part-time 
the 
availability  of  high-quality  early  childhood 
education  and  care  (ECEC)  is  insufficient  and 
available  places 
for  ECEC  are  often 
incompatible with full-time work. 

In  addition, 

Only  around  1  in  4  children  under  three 
participated  in  early  childhood  education 
and care in 2023. As a result, Austria is well 
below  its  national  Barcelona  target  of  31.9% 
as  well  as  the  EU  average.  In  addition,  the 
available  places  for  early childhood  education 
and care (ECEC) are often not compatible with 
full-time work, with strong regional disparities 
in  availability.  As  demonstrated  by  a  recent 
study, increasing the supply of childcare places 
could increase the labour market participation 
of  mothers,  in  particular  those  in  the  bottom 
half of the income distribution, by 17 pps and 
increase  their  hours  worked  by  4.2  hours  per 
week (62)  (see  Annex  10).  Austria’s  recovery 
(RRP)  also  contains 
and 
investments  to  improve  access  to  ECEC.  The 
government continues to implement measures 
to improve the availability and quality of ECEC, 
Future 
Fund 
such 
(Zukunftsfonds) (63), as well as to improve the 
attractiveness of the teaching profession. 

resilience  plan 

the 

the 

for 

as 

(60)  Statistik Austria (2023), Zeitverwendung 2021/22. 

(61)  Eurostat, Labour force survey, 

https://doi.org/10.2908/LFSA_EPGAR 

(62)  Narazani, E., Christl, M., & Figari, F. (2024). More 

childcare for the poor? Budgetary impacts and female 
labour supply responses in Italy, Austria and Hungary. 

(63)  A new financing instrument in the multiannual fiscal 

framework 2024-2028; inspired by the RRF. EUR 1.1 mil 
per year for childcare, housing, and climate protection. 

17 

Even 

though 

demand. 

Boosting  the  labour  market  participation 
of older workers could help meet growing 
labour 
the 
employment  rate  of  older  workers  (55-64) 
increased  from  54.5%  in  2019  to  58.8%  in 
2024, it remains well below the EU average of 
65.2%.  The  employability  of  older  people  is 
partly  impeded  by  low  levels  of  digital  skills, 
other  factors,  like  age  discrimination  and 
negative  employer  attitudes  towards  older 
workers, remain a significant obstacle to their 
employment (64).  Targeted  measures,  such  as 
50+’ 
the 
(Beschäftigungsinitiative  50+)  are  aimed  at 
improving  outcomes 
for  older  workers. 
Reducing disincentives among older workers to 
work  for  longer  by  adapting  the  tax  system 
and reducing social contributions could support 
the  trend  towards  higher 
labour  market 
participation of this demographic group. 

‘employment 

initiative 

Better  labour  market  integration  of  low-
qualified  and  migrant  workers  could 
further  ease  the  shortage  of  workers. 
Although  the  employment  rate  of  the  low 
qualified  is  broadly  on  a  par  with  the  EU 
average, it is almost 20 pps below the overall 
employment  rate  in  Austria.  Low  levels  of 
basic skills are a key obstacle to employment 
(see  Annex  12).  Those  born  outside  the  EU, 
while  showing  higher  employment 
rates 
(65.7%)  than  older  workers  and  the  low-
qualified,  are in  part  held back  by  inadequate 
language  skills  and  limited  recognition  of 
qualifications. Strengthening incentives to take 
up work and improve language skills may help 
enhance employment outcomes for this group 
and  contribute  to  reaching  the  2030  national 
employment target of 79.9% (see Annex 10). 

The lack of adequate skills is a 
structural challenge 

Enhancing  skills  development  is  crucial, 
yet  adult  participation  in  training  is 
stagnant.  Participation  in  training  among 
adults  has  been  declining  since  2016  and 

(64)  2023, Eurobarometer. 

 
 
 
remains  well  below  the  2030  national  target 
of  62.0%  (see  Annex  12).  Participation  has 
been  low,  in  particular  among  those  facing 
skills  challenges:  only  around  1  in  5  low-
qualified adults and 2 in 5 older workers have 
been  participating  in  training,  exacerbating 
their  vulnerability  to  unemployment  amid  the 
digital and green transitions. The Austrian RRP 
contains  an  investment  to  upskill  and  reskill 
people  to  improve  their  access  to  the  labour 
market.  However,  public  spending  on  adult 
education  has  decreased 
to 
previous  years.  The  abolition  of  paid 
educational  leave  (Bildungskarenz)(65),  which 
was announced in January 2025 as part of the 
fiscal  consolidation package,  could  reduce  the 
options  for  further  qualification.  Finally,  if 
companies invested more in adult learning and 
training, 
to 
improve the skills of the workforce. 

this  could  significantly  help 

compared 

and 

science. 

The lack of basic skills poses a long-term 
challenge  to  addressing  skills  shortages. 
According  to  2022  OECD  Programme  for 
International  Student  Assessment 
(PISA), 
about  a  quarter  of  pupils  in  Austria  lack  a 
in  reading, 
minimum 
level  of  proficiency 
Pupil 
mathematics 
underperformance  increases  to  almost  every 
second  15  year-old  with  a  disadvantaged 
socioeconomic  background  or  born  abroad 
(Annex  12).  There  is  a  high  and  increasing 
proportion  of  pupils  with  a  migrant  and 
disadvantaged  background  and  this  poses 
challenges  (such  as  language  barriers)  for 
teaching. Moreover, schools continue to report 
a lack of resources (66). At the same time, the 
number  of  pupils  is  continuing  to  increase. 
About  a  fifth  of  primary  school  teachers  and 
about a quarter of middle school teachers are 
over  the  age  of  55  and  will  retire  in  the 
coming  decade.  This  threatens  to  compound 
the  lack  of  teachers.  Moreover,  the  lack  of 
basic  skills  extends  to  adults,  particularly 
among those with a migrant or disadvantaged 
socioeconomic  background.  These  gaps 
in 
basic  skills  also  stem  from  the  worsening 

basic  skills  among  school  pupils.  The  RRP 
provides  for  adopting  a  legal  act  establishing 
criteria  for  the  specification  of  the  socio-
economic  baseline  of  schools.  The  criteria 
would guide the allocation of human resources 
to schools and prioritise the allocation to those 
schools  whose  socio-economic profile  is more 
demanding.  Moreover,  further  strengthening 
the  development  of  basic  and  STEM  skills  at 
every stage from children’s education to adult 
learning is key to addressing skills shortages. 

Women,  single  parents  and  notably 
children  are  particularly  at  risk  of 
poverty  or  social  exclusion 
(AROPE). 
Whereas  the  AROPE  rate  in  Austria  (17.7%  in 
2023) remained well below the EU average, it 
has been rising continuously since 2019. As a 
result,  Austria  has  moved  further  away  from 
reaching  its  2030  national  target  of  reducing 
poverty.  In  particular,  the  AROPE  rate  for 
women  increased  to  18.5%  in  2023,  while  it 
decreased to 16.5% for men. Single parents in 
particular,  of  whom  83%  are  women,  are 
hindered  from  participating  in  the 
labour 
market  by  the  lack  of  affordable  high-quality 
ECEC.  This  contributed  to  a  significant  AROPE 
rate of 45.3% in this group in 2023. More than 
1 in 5 children, with even higher rates among 
those  from  a  migrant  or  disadvantaged 
socioeconomic  background,  were  at  risk  of 
Besides 
poverty 
implementing  the  European  Child  Guarantee 
(67) and other related measures, providing free 
full-time childcare could alleviate poverty risks 
among children. 

exclusion. 

social 

or 

People  with  a  migrant  background  are 
more  at  risk  of  poverty.  Among  other 
reasons,  limited  opportunities  in  the  labour 
market,  driven  by  institutional,  language  and 
skills  barriers  as  well  as  a  lack  of  recognition 
of  qualifications,  contribute 
to  elevated 
poverty  risk  among  those  with  a  migrant 
background.  In  2023,  people  born  outside 
Austria  experienced  a  significantly  higher 
AROPE  rate  (34.2%)  compared  to  those  born 

(65)  The Austrian government programme indicates the 
intention to set a up more targeted model of the 
abolished Bildunskarenz from 2026.  

(66)  European Commission (2024), Education and training 

monitor 2024 

(67)  The European Child Guarantee is an instrument which 
seeks to ensure that every child living in the EU at risk 
of poverty has access to free quality health care, free 
quality education, free quality childcare, decent housing 
and adequate nutrition 

18 

 
 
 
spending an ever-higher share of their income 
on housing. 

within Austria (11.4%). Among those who were 
born outside the EU, the risk was even higher, 
affecting  approximately  50%.  Even  after 
naturalisation, 
a  migrant 
those  with 
background  are  more  likely  to  experience 
severe material and social deprivation (14% of 
people  with  a  migrant  background  vs  3%  of 
people without a migrant background. 

Austria’s  healthcare  and  long-term  care 
systems  are  performing  relatively  well, 
albeit at high costs. Life expectancy in 2023 
was  above  the  EU  average,  but  it  remained 
below pre-COVID-19 levels. Despite significant 
in  prevention  (7.4%  of  total 
investments 
in  2022(68),  additional 
health  expenditure 
years  of  life  gained  are  often  not  spent  in 
good health, as healthy life expectancy at birth 
for women (61.3) and men (60.6) is below the 
EU  average  (62.8  for  women  and  62.4  for 
men).  The  fact  that  Austria’s  healthcare 
system  is  very  hospital-centred  poses  a  risk 
not only to its fiscal sustainability, but also to 
its accessibility. Regional and specialty-specific 
doctor  shortages  hinder  outpatient  care,  and 
staff  shortages  affect  service  availability  in 
both  the  healthcare  and 
long-term  care 
sectors. Furthermore, adoption of e-health and 
digital  solutions  has  been  slow.  Regulatory 
measures  could  help  to  reduce  the  use  and 
number of hospitals, for example by providing 
better guidance to patients. 

continues 

affordability 

House  prices  stabilised  in  2024,  but 
housing 
to 
deteriorate.  Over  the  past  decade,  house 
prices  have  increased  by  60%,  reaching  their 
peak  in  2022.  The  pace  of  this  increase  has 
exceeded the growth of household incomes. As 
a  result,  the  standardised  house  price-to-
income  ratio  has  increased  by  22%  since 
2015 (69).  Similarly,  the  ratio  of  new  rents  to 
incomes  has  increased  over  the  last  decade 
especially in city centres. This means that even 
though  the  housing  overburden  rate  remains 
low  in  Austria,  the  average  household  is 

(68)  Including expenditure related to the COVID-19 

pandemic. 

(69)  European Commission 2024, Alert Mechanism Report 

2025. 

19 

 
 
KEY FINDINGS 

To  boost  competitiveness,  sustainability  and 
social fairness, Austria would benefit from: 

• 

implementing  the  RRP, 
including  the 
REPowerEU  chapter;  swiftly  implementing 
cohesion  policy,  taking  advantage  of  the 
opportunities  under  the  mid-term  review 
and making optimal use of EU instruments, 
including  InvestEU  and  STEP,  to  improve 
competitiveness;  

•  consolidating 

finances 

by 
public 
decisively  containing  the  increase  in  age-
related  public  expenditure  on  pensions, 
health,  and  long-term  care,  including  by 
significantly raising the effective retirement 
age  and  simplifying  the  fiscal  framework 
across  government 
to  enhance 
spending efficiency; 

levels 

•  further  improving  the  tax  mix  to  be 
more  conducive  to  growth  by  shifting  the 
tax  burden  away  from  labour  and  ending 
environmentally harmful tax exemptions; 

•  recalibrating the innovation system by 
focusing  on  high-impact  innovation  and  by 
improving  the  spending  efficiency  of  R&D 
schemes  to  achieve  outcomes  comparable 
to those of European innovation leaders; 

and 

•  enhancing  the  business  environment, 
competition 
by 
simplifying  administrative  and  permitting 
procedures  and  removing  restrictions  in 
professional  services,  including  barriers  for 
providers from other EU countries;  

productivity 

• 

improving  investment  conditions  for 
firms;  by  promoting  better  access  to  risk 
capital; to support the creation and growth 
of new companies, as well  as by  removing 
barriers 
to 
institutional 
support young innovative firms; 

investors 

for 

•  boosting  digital  transformation  by 
encouraging  the  adoption  of  advanced 
digital  technologies,  including  by  continued 
investment in skills and infrastructure; 

•  addressing  high  energy  costs  and 
accelerating 
transition  by 
the  energy 
adopting  the  necessary  regulatory  reforms 
(electricity  market  and  permitting)  and 
ensuring  investments,  in  particular  in  grids 
to make the energy system more flexible; 

•  achieving the effort-sharing targets by 
swiftly  and  fully  implementing  additional 
measures,  in  particular  by  accelerating  the 
decarbonisation of the transport sector; 

•  expanding  net-zero 

industries,  by 
encouraging  investment  and  by  further 
streamlining  and  digitalising  permitting 
procedures  and  by  ensuring  skilled  labour 
supply for the green transition; 

•  reducing  waste 

and 
improving resource efficiency by stepping 
up investments in the circular economy; 

production 

•  addressing 

labour 

shortages 

by 
encouraging  people  to  work  more  hours 
including  by  improving  tax  incentives,  and 
by  further  enhancing  the  quality  and 
availability  of  early  childhood  education 
and care to better facilitate employment of 
individuals  with 
responsibilities, 
notably women; 

care 

•  tackling  skills  shortages,  including  by 
enhancing  labour  market  access  and  the 
skills  development  of  older  workers,  the 
low-skilled  and  those  with  a  migrant 
background, 
adult 
participation  in  training  and  improving  the 
basic skills of disadvantaged pupils; 

increasing 

by 

•  ensuring  access  to  healthcare  by 
strengthening  outpatient  care,  in  particular 

20 

 
 
in  areas  with  insufficient  staff  and  long 
waiting times. 

21 

 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Fiscal 

A1.  Fiscal surveillance and debt sustainability 

A2.  Taxation 

Productivity 

A3. 

Innovation to business 

A4.  Making business easier 

A5.  Capital markets, financial stability and access to finance 

A6.  Effective institutional framework 

Sustainability 

A7.  Clean industry and climate mitigation 

A8.  Affordable energy transition 

A9.  Climate adaptation, preparedness and environment 

Fairness 

A10.  Labour market 

A11.  Social policies 

A12.  Education and skills 

A13.  Social Scoreboard 

A14.  Health and health systems 

Horizontal 

A15.  Sustainable development goals 

A16.  CSR progress and EU funds implementation 

A17.  Competitive regions 

LIST OF TABLES 

General government balance and debt 
Net expenditure 
Net expenditure (outturn and forecast), deviations vis-à-vis the medium-term plan 
Defence expenditure 

A1.1. 
A1.2. 
A1.3. 
A1.4. 
A1.5.  Macroeconomic developments and forecasts 
A1.6. 
A1.7. 
A1.8. 
A1.9. 

General government budgetary position 
Debt developments 
RRF – Grants 
Projected change in age-related expenditure in 2024-2040 and 2024-2070 

25 

26 

26 

32 

34 

34 

39 

45 

53 

58 

58 

65 

71 

77 

77 

82 

86 

91 

92 

95 

95 

97 

104 

27 
27 
28 
28 
28 
29 
29 
30 
31 

 
 
 
Financial indicators 
Austria. Selected indicators on administrative burden reduction and simplification 
Key Digital Decade targets monitored through the Digital Economy and Society Index 
Key clean industry and climate mitigation indicators: Austria 
Key Energy Indicators 
Key indicators tracking progress on climate adaptation, resilience and environment 

A1.10.  Fiscal Governance Database Indicators 
A2.1. 
Taxation indicators 
A3.1. 
Key innovation indicators 
A4.1.  Making Business Easier: indicators. 
A5.1. 
A6.1. 
A6.2. 
A7.1. 
A8.1. 
A9.1. 
A13.1.  Social Scoreboard for Austria 
A14.1.  Key health indicators 
A16.1.  Selected EU funds with adopted allocations - summary data (million EUR) 
A16.2.  Summary table on 2019-2024 CSRs 
A17.1.  Selection of indicators at regional level in Austria 

LIST OF GRAPHS 

A2.1. 
A2.2. 
A3.1. 

Tax revenue shares in 2023 
Tax wedge for single and second earners, % of total labour costs, 2024 
Patent applications filed under the PCT per billion GDP (in PPS €) in relation to R&D intensity (gross domestic expenditure 
on R&D as a percentage of GDP) 
Venture capital (market statistics) as a percentage of GDP, 2023 total 

Greenhouse gas emissions in the effort sharing sectors, 2005 and 2023 
Retail energy price components for household and non-household consumers, 2024 

Austria's installed renewable capacity (left) and electricity generation mix (right) 
Direct dependency(1) on ecosystem services(2) of the gross value added generated by economic sector in 2022 
Investment needs and gaps in EUR million, in 2022 constant prices 

A3.2. 
A4.1.  Making Business Easier: selected indicators.* 
A5.1. 
Net savings-investment balance 
A5.2. 
International investment position 
A5.3. 
Capital markets and financial intermediaries 
A5.4. 
Composition of NFC funding as a % of GDP 
A5.5. 
Composition of HH financial assets per capita and as a % of GDP 
A6.1. 
Trust in justice, regional / local authorities and in government 
A6.2. 
Indicators of Regulatory Policy and Governance (iREG) 
A7.1. 
GHG emission intensity of manu-facturing and energy-intensive sectors, 2022 
A7.2.  Manufacturing industry production: total and selected sectors, index (2021 = 100), 2017-2023 
A7.3. 
A8.1. 
A8.2.  Monthly average day-ahead wholesale electricity prices and European benchmark natural gas prices (Dutch TTF) 
A8.3. 
A9.1. 
A9.2. 
A10.1.  Employment growth by sector 
A10.2.  Austria’s Beveridge curve 
A10.3.  Activity and employment rates 
A11.1.  AROPE rates 
A11.2.  AROPE rates by group 
A12.1.  Underachievement rates by field, PISA 2012, 2018 and 2022 (%) 
A12.2.  Future employment needs (2022-2035) by occupation and education level 
A14.1.  Life expectancy at birth, years 
A14.2.  Treatable mortality 
A15.1.  Progress towards the SDGs in Austria 
A16.1.  Distribution of RRF funding in Austria by policy field 
A16.2.  Distribution of cohesion policy funding across policy objectives in Austria 
A17.1.  Average annual GDP per head growth vs GDP per head in 2013 
A17.2.  Labour productivity per hour 
A17.3.  Access to healthcare and primary education in rural areas, 2023 

31 
32 
38 
44 
52 
54 
55 
64 
70 
76 
91 
93 
100 
101 
105 

32 
33 

35 
36 
40 
45 
45 
46 
48 
49 
53 
53 
60 
61 
62 
65 
66 
67 
73 
74 
77 
78 
79 
82 
83 
86 
88 
92 
92 
95 
98 
98 
104 
105 
108 

26 

 
 
 
LIST OF MAPS 

A17.1.  GDP per head (in purchasing power standard PPS), 2023 
A17.2.  Regional Competitiveness Index 2.0, 2022 edition 
A17.3.  House prices relative to income, 2019 

104 
106 
107 

27 

 
 
 
 
FISCAL 
ANNEX 1: FISCAL SURVEILLANCE AND DEBT SUSTAINABILITY 

This  Annex  contains  a  series  of  tables  relevant  for  the  assessment  of  the  fiscal  situation  in  Austria, 
including  how  Austria  is  responding  to  Council  recommendations  issued  under  the  reformed  Economic 
Governance Framework. 

The  reformed  framework,  which  entered  into  force  on  30  April  2024(70),  aims  to  strengthen  debt 
sustainability  and  promote  sustainable  and  inclusive  growth  through  growth-enhancing  reforms  and 
priority investments. The medium-term fiscal-structural plans (hereinafter, MTPs or plans) constitute the 
cornerstone  of  the  framework,  setting  the  budgetary  commitment  of  Member  States  over  the  medium 
term. The latter is defined in terms of net expenditure growth, which is the single operational indicator for 
fiscal surveillance.  

Austria  submitted  its  plan  on  13  May  2025.  The  plan  covers  the  period  until  2029,  and  presents  an 
extended fiscal adjustment over seven years, which is underpinned by a set of reforms and investments 
to  which  Austria  committed  with  the  aim  of  improving  potential  growth  and  fiscal  sustainability.  The 
assessment of the plan by the Commission is ongoing at the cut-off date of this Report. 

In  the  context  of  the  Commission  Communication  of  19  March  2025(71),  on  accommodating  defence 
expenditure  within  the  Stability  and  Growth  Pact,  the  Annex  reports  the  projected  increase  in  defence 
expenditure based on the Commission Spring 2025 Forecast. 

The Annex is organised as follows. First, developments in  government deficit and debt are presented 
based  on  the  figures  reported  in  Table  A1.1.  Then,  an  assessment  of  the  fiscal  situation  of  Austria 
follows,  including  developments  of  net  expenditure  growth  and  data  on  defence  expenditure,  based  on 
relevant figures presented in Tables A1.2 to A1.8. The fiscal situation of Austria is described on the basis 
of  outturn  data  from  Eurostat,  the  Commission  Spring  2025  Forecast,  and  the  Annual  Progress  Report 
(APR), submitted by Austria on 13 May 2025.  

The Annex also provides information on the cost of ageing and the national fiscal framework. Fiscal 
sustainability risks are discussed in the Debt Sustainability Monitor 2024.(72) 

Developments in government deficit and debt  

Austria’s government deficit amounted to 4.7% of GDP in 2024. Based on the Commission Spring 2025 
Forecast, it is projected to decrease to 4.4% of GDP in 2025. The government debt-to-GDP ratio amounted 
to 81.8% at the end of 2024 and, according to the Commission, it is projected to increase to 84.0% end-
2025.  

(70)  Regulation (EU) 2024/1263 of the European Parliament and of the Council (EU) on the effective coordination of economic policies 
and on multilateral budgetary surveillance, together with the amended Regulation (EC) No 1467/97 on the implementation of the 
excessive deficit procedure, and the amended Council Directive 2011/85/EU on the budgetary frameworks of Member States are the 
core elements of the reformed EU economic governance framework. 

(71)  Communication from the Commission accommodating increased defence expenditure within the Stability and Growth Pact of 19 

March 2025, C(2025) 2000 final. 

(72)  Commission (2025) ‘Debt Sustainability Monitor 2024,’ European Economy-Institutional Papers 306. 

28 

 
 
 
 
 
Table A1.1:  General government balance and debt 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Developments in net expenditure  

The  net  expenditure(73)  growth  of  Austria  in  2025  is  forecast  by  the  Commission(74)  to  be  below  the 
maximum growth rate contained in the plan.  

Austria’s defen ce b udget in creased fro m  0.6% of G DP in  2021 to  0.7% in  2024. While  Au stria’s neutrality is e nshrined in its co nstitution an d up held by th e new govern ment, it is  envisa ged to  gradually  increa se further u nder the  Au strian Ar med F orce s Develop ment Pl an  2032+.  

Table A1.2:  Net expenditure 

(1) The cumulative growth rates are calculated by reference to the base year of 2024. 
Source:  Medium-term fiscal structural plan of Austria, Annual Progress Report (APR), and Commission’s calculation based on 
Commission Spring 2025 Forecast (COM). 

Source:  

General government defence expenditure in Austria remained stable at 0.6% of GDP between 2021 and 
2023(75). According to the Commission 2025 Spring Forecast, expenditure on defence is projected at 0.7% 
of GDP in 2024 and 0.8% of GDP in 2025. 

(73)  Net expenditure is defined in Article 2(2) of Regulation (EU) 2024/1263 as government expenditure net of (i) interest expenditure, 
(ii) discretionary revenue measures, (iii) expenditure on programmes of the Union fully matched by revenue from Union funds, (iv) 
national  expenditure  on  co-financing  of  programmes  funded  by  the  Union,  (v)  cyclical  elements  of  unemployment  benefit 
expenditure, and (vi) one-off and other temporary measures.  

(74)  Commission Spring 2025 Forecast, European Economy-Institutional paper 318, May 2025. 

(75)  Eurostat, government expenditure by classification of functions of government (COFOG). 

29 

2024OutturnAPRCOMAPRCOM1General government balance% GDP-4.7-4.5-4.4n.a.-4.22General government gross debt% GDP81.884.784.0n.a.85.8Variables20252026MTPAPRCOMMTPAPRCOM2024n.a.8.6%8.7%n.a.n.a.n.a.20252.6%1.6%2.0%2.6%1.6%2.0%20262.2%n.a.2.3%4.8%n.a.4.3%AnnualCumulative*Growth rates 
 
        
 
 
           
 
 
 
 
Table A1.3:  Net expenditure (outturn and forecast), deviations vis-à-vis the medium-term plan 

* The medium-term plan is being assessed by the Commission at the cut-off date of this Report. 
Source: Commission Spring 2025 Forecast and Commission's calculation 

Table A1.4:  Defence expenditure 

Source:  Eurostat (COFOG), Commission Spring 2025 Forecast and Commission's calculation 

Table A1.5:  Macroeconomic developments and forecasts 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

30 

2023202420252026OutturnOutturnCOMCOM1Total expenditurebn NAC249.5271.3280.3288.92Interest expenditurebn NAC5.77.38.69.23Cyclical unemployment expenditurebn NAC0.00.20.40.44Expenditure funded by transfers from the EUbn NAC1.40.90.90.95National co-financing of EU programmesbn NAC0.90.90.70.86One-off expenditure (levels, excl. EU funded)bn NAC0.00.00.00.07=1-2-3-4-5-6Net nationally financed primary expenditure (before discretionary revenue measures, DRM)bn NAC241.5261.9269.8277.78Change in net nationally financed primary expenditure (before DRM)bn NAC20.47.87.99DRM (excl. one-off revenue, incremental impact)bn NAC-0.72.51.810=8-9Change in net nationally financed primary expenditure (after DRM) bn NAC21.15.36.111Outturn / forecast net expenditure growth% change8.74%2.0%2.3%12Net expenditure growth as reported in the medium-term plan *% changen.a.2.6%2.2%13=(11-12) x 7Annual deviationbn NACn.a.-1.50.214 (cumulated from 13)Cumulated deviationbn NACn.a.-1.5-1.315=13/17Annual balance% GDPn.a.-0.30.016=14/17Cumulated balance% GDPn.a.-0.3-0.317p.m. Nominal GDP  bn NAC473.2481.9497.3513.2Variables2021202220232024202520261Total defence expenditure% GDP0.60.60.60.70.80.82of which: gross fixed capital formation% GDP0.10.10.10.10.10.12024OutturnAPRCOMAPRCOM1=7+8+9Real GDP% change-1.2-0.3-0.3n.a.1.02Private consumption% change0.10.20.3n.a.1.03Government consumption expenditure% change1.6-0.3-0.4n.a.-0.44Gross fixed capital formation% change-3.4-0.7-0.7n.a.1.95Exports of goods and services% change-4.3-0.9-1.0n.a.1.96Imports of goods and services% change-5.0-0.2-0.6n.a.1.9Contributions to real GDP growth 7- Final domestic demandpps-0.5-0.1-0.1n.a.0.98- Change in inventoriespps-1.00.30.0n.a.0.09- Net exportspps0.4-0.4-0.2n.a.0.110Output gap% pot GDP-1.2-1.9-1.7n.a.-1.111Employment % change0.00.20.1n.a.0.412Unemployment rate%5.25.35.3n.a.5.213Labour productivity% change-1.2-0.5-0.4n.a.0.514HICP % change2.92.82.9n.a.2.115GDP deflator% change3.12.43.5n.a.2.216Compensation of employees per head% change8.43.43.2n.a.3.117Net lending/borrowing vis-à-vis the rest of the world% GDP2.5n.a.2.9n.a.2.720252026Variables 
            
 
 
 
   
 
 
 
           
 
 
Table A1.6:  General government budgetary position 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Table A1.7:  Debt developments 

(1) End of period. (2) The 'snow-ball' effect captures the impact of interest expenditure on accumulated general government debt, 
as well as the impact of real GDP growth and inflation on the general government debt-to-GDP ratio (through the denominator). 
The stock-flow adjustment includes differences in cash and accrual accounting (including leads and lags in Recovery and 
Resilience Facility grant disbursements), accumulation of financial assets, and valuation and other residual effects. 
Source: Commission Spring 2025 Forecast and Commission's calculation (COM), Annual Progress Report (APR) 

31 

2024OutturnAPRCOMAPRCOM1=2+3+4+5Revenue51.652.252.0n.a.52.1of which:2- Taxes on production and imports14.014.714.7n.a.14.73- Current taxes on income, wealth, etc.14.414.114.1n.a.14.14- Social contributions16.416.716.7n.a.16.75- Other (residual)6.86.76.6n.a.6.68=9+16Expenditure 56.356.856.4n.a.56.3of which:9- Primary expenditure54.855.154.6n.a.54.5of which:10- Compensation of employees 11.511.611.7n.a.11.711- Intermediate consumption7.17.27.1n.a.7.012- Social payments24.925.625.5n.a.25.613- Subsidies2.01.91.8n.a.1.714- Gross fixed capital formation3.93.93.9n.a.4.015- Other5.44.94.7n.a.4.616- Interest expenditure1.51.71.7n.a.1.818=1-8General government balance-4.7-4.5-4.4n.a.-4.219=1-9Primary balance-3.2-2.8-2.7n.a.-2.420Cyclically adjusted balance-4.0n.a.-3.4n.a.-3.621One-offs0.00.00.0n.a.0.022=20-21Structural balance-4.0-3.4-3.4n.a.-3.623=22+16Structural primary balance-2.5-1.7-1.7n.a.-1.8Variables (% GDP)202520262024OutturnAPRCOMAPRCOM1Gross debt ratio* (% of GDP)81.884.784.0n.a.85.82=3+4+8Change in the ratio (pps. of GDP)3.32.92.3n.a.1.7Contributions**3Primary balance3.22.82.7n.a.2.44≈5+6+7'Snow-ball' effect0.10.0-0.8n.a.-0.8of which:5- Interest expenditure1.51.71.7n.a.1.86- Real growth effect0.90.20.2n.a.-0.87- Inflation effect-2.3-1.9-2.7n.a.-1.88'Stock-flow' adjustment0.00.10.4n.a.0.120252026Variables 
 
           
 
 
 
           
 
 
Table A1.8:  RRF – Grants 

Source: Annual Progress Report 

Cost of ageing  

Total age-related spending in Austria is projected to rise from about 28% of GDP in 2024 to 
about  29%  in  2040  and  30%  in  2070  (see  Table  A1.9).    The  overall  increase  is  the  result  of  the 
projected rise in long-term care and healthcare expenditure, with pension and education spending broadly 
unchanged  in  the  long  term.  In  2070,  Austria  would  have  the  second  highest  overall  spending  on  age-
related items of all Member States.  

Public pension spending is projected to increase over the next decade by nearly 1 pp of GDP 
but decline again thereafter, stabilising at around 14% of GDP as of 2050. Despite the overall 
stability  in  the  long  term,  in  2070  Austria  would  remain  among  the  Member  States  with  the  highest 
pension spending level. 

The  projected  increases  in  health  and  long-term  care  public  spending,  due  to  an  ageing 
population, pose a risk to fiscal sustainability in the medium and long term for Austria. Public 
healthcare  expenditure  is  projected  at  7.7%  of  GDP  in  2024  (above  the  EU  average  of  6.6%)  and  is 
expected to increase by 0.7 pps by 2040 and by a further 0.5 pps by 2070 (76). Public expenditure on long-
term care is projected at 1.6% of GDP in 2024 (slightly below the EU average of 1.7%) and is expected to 
increase by 0.5 pps of GDP by 2040 and by a further 0.9 pps of GDP by 2070 (77).  

(76)  Key performance characteristics, recent reforms and investments of the Austrian healthcare system are discussed in Annex 14 

‘Health and health systems’.     

(77)  The adequacy and quality of the Austrian long-term care system are covered in Annex 11 ‘Social policies’.    

32 

Revenue from RRF grants (% of GDP)20202021202220232024202520261RRF grants as included in the revenue projectionsn.a.0.10.20.20.10.10.02Cash disbursements of RRF grants from EUn.a.0.10.00.20.00.40.120202021202220232024202520263Total current expenditure0.00.10.10.00.00.00.04Gross fixed capital formation0.00.00.00.00.00.00.05Capital transfers0.00.00.10.10.00.00.06=4+5Total capital expenditure0.00.00.10.20.10.00.020202021202220232024202520267Reduction in tax revenue0.00.00.00.00.00.00.08Other costs with impact on revenue0.00.00.00.00.00.00.09Financial transactions0.00.00.00.00.00.00.0Expenditure financed by RRF grants (% of GDP)Other costs financed by RRF grants (% of GDP) 
 
           
 
 
Table A1.9:  Projected change in age-related expenditure in 2024-2040 and 2024-2070 

Source: 2024 Ageing Report (EC/EPC). 

National fiscal framework 

Austria  has  chosen  to  split  the  Independent  Fiscal  Institution  (IFI)  tasks  between  two 
institutions. The Austrian Institute of Economic Research (WIFO) produces the macroeconomic forecast 
underlying the government's budgetary plans, while the Austrian Fiscal  Advisory Council (FISK) monitors 
compliance with fiscal rules and delivers forecasts, long-term projections and, more sporadically, costing 
of  measures.  This  set-up  leverages  established  institutions  and  practices  but  could  make  it  difficult  to 
identify a clear IFI reference point. Both institutions seem to have sufficient resources for their currently 
assigned tasks, but there are no explicit mechanisms in place to ensure stable funding. The policy dialogue 
with  the  government  and  parliament  could  be  improved.  Both  institutions  are  relatively  present  in 
traditional media and have stand-alone websites, as well as social media presence.   

Austria has one of the most comprehensive national frameworks in terms of the integration of 
green budgeting into its budgetary decision-making. The Federal Ministry of Finance has established 
a  green  budgeting  focal  point  as  an  inter-institutional  point  of  contact  coordinating  green  budgeting 
activities and has developed  a range of instruments to support the implementation of green budgeting, 
including  impact  assessments  and  green  spending  reviews.  Activities  cover  the  climate-specific  and 
environment-specific impacts of all budgetary, regulatory, and tax policy measures.   

The  Federal  Ministry  of  Finance  has  started  integrating  climate-related  risks  into  its  fiscal 
forecasts. For the first time, it assessed and reported on the potential fiscal impacts of climate change 
mitigation  efforts  until  2050  in  its  2022  Long-Term  Budget  Forecast.  Findings  were  presented  to 
Parliament and published.  

Table A1.10:Fiscal Governance Database Indicators 

The Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at the country level based 
on i) the legal base, ii) how binding the rule is, iii) monitoring bodies, iv) correction mechanisms, and v) resilience to shocks. The 
Medium-Term Budgetary Framework Index (MTBFI) shows the strength of the national MTBF based on i) coverage of the 
targets/ceilings included in the national medium-term fiscal plans; ii) connectedness between these targets/ceilings and the 
annual budgets; iii) involvement of the national parliament in the preparation of the plans; iv) involvement of independent fiscal 
institutions in their preparation; and v) their level of detail. A higher score is associated with higher rule and MTBF strength. 
Source: Fiscal Governance Database 

33 

AT28.00.40.70.5-0.31.329.3ATEU24.30.50.30.4-0.30.925.2EUAT28.0-0.11.21.5-0.32.230.2ATEU24.30.20.60.8-0.41.325.6EUage-related expenditure 2024 (% GDP)change in 2024-2040 (pps GDP) due to:age-related expenditure 2040 (%GDP)pensionshealthcarelong-term careeducationtotalage-related expenditure 2024 (% GDP)change in 2024-2070 (pps GDP) due to:age-related expenditure 2070 (%GDP)pensionshealthcarelong-term careeducationtotal2023AustriaEU AverageCountry Fiscal Rule Strength Index (C-FRSI)13.4814.52Medium-Term Budgetary Framework Index (MTBFI)0.600.73 
 
  
 
 
     
 
ANNEX 2: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  Austria’s  tax  system.  It  includes 
information on: (i) the tax mix; (ii) competitiveness 
and  fairness  aspects  of  the  tax  system;  and  (iii) 
tax collection and compliance. 

Graph A2.1: Tax revenue shares in 2023 

social 

(including 

Austria’s  tax  revenues  relative  to  GDP  are 
high,  with  the  largest  contribution  coming 
from  labour  taxation,  while  growth-friendly 
tax  bases  appear  to  be  underused.  In  2023, 
total  tax  revenues  in  Austria  as  a  percentage  of 
GDP 
security 
compulsory 
contributions)  amounted  to  43.1%.  Despite  a 
series  of  tax  reforms  (in  2005,  2010,  2015  and 
two  in  2022),  Austria  remains  a  high-tax  country 
with a tax-to-GDP ratio above the EU average. As 
shown  in  Table  A2.1,  labour  tax  revenues  as  a 
percentage  of  GDP  in  2023  were  among  the 
highest  in  the  EU.  Revenues  from  consumption 
taxes and environmental taxes as a percentage of 
GDP were very close to the EU average. Revenues 
from capital taxes and property taxes were below 
the  EU  average.  Recurrent  taxes  on  property  as  a 
percentage  of  GDP  in  Austria  were  among  the 
lowest  in  the  EU,  partly  because  the  cadastral 
values used as the tax base are largely outdated. 
In  addition,  Austria  has  no  inheritance,  estate, 
wealth or gift taxes. 

Source: Taxation Trends Data, DG TAXUD 

tax 

system 
risks  due 

Austria’s 
faces  moderate 
to  an  ageing 
sustainability 
population  and  an  excessive  reliance  on 
labour  taxes.  In  2023,  Austria  performed  better 
than  the  EU  average  in  labour  market  indicators 
(participation  and 
rates)  and 
dependency ratios, and this is expected to remain 
the case until 2050. 

employment 

Austria  provides  several  tax  incentives  for 
investment.  Considerable  tax  support  for  R&D 
(0.22%  of  GDP)  is  available.  Venture  capital 
investments  can  also  benefit  from  these  tax 

Table A2.1:  Taxation indicators 

(1) Forward-looking effective tax rate (KPMG).  
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2023. For more details on the VAT gap, see European Commission, Directorate-General for Taxation and 
Customs Union, VAT gap in the EU - 2024 report, https://data.europa.eu/doi/10.2778/2 476 549 
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage, 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en.  
Source: European Commission, OECD 

34 

51.226.921.954.726.518.8Tax revenue shares in 2023, Austria (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capitalATMedian (EU-27)2010202120222023202420102021202220232024Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)41.443.643.143.137.840.239.739.0Taxes on labour (% of GDP)23.324.123.023.619.820.520.120.0of which, social security contributions (SSC, % of GDP)14.215.514.815.112.913.012.712.7Taxes on consumption (% of GDP)11.711.511.311.410.911.210.910.5of which, value added taxes (VAT, % of GDP)7.77.57.98.06.87.37.47.1Taxes on capital (% of GDP)6.48.08.98.17.18.58.78.5Personal income taxes (PIT, % of GDP)9.69.99.79.58.69.69.49.3Corporate income taxes (CIT, % of GDP)2.02.83.53.42.22.93.23.2Total property taxes (% of GDP)0.60.90.80.61.92.22.11.9Recurrent taxes on immovable property (% of GDP)0.20.20.20.21.11.11.00.9Environmental taxes (% of GDP)2.42.41.92.02.52.42.12.0Effective carbon rate in EUR per tonne of CO2 equivalentsNA82.7NA89.9NA86.0NA84.8Tax wedge at 50% of average wage (single person) (*)38.437.234.236.937.233.931.831.531.531.8Tax wedge at 100% of average wage (single person) (*)48.247.846.947.247.040.939.939.940.240.3Corporate income tax - effective average tax rates (1) (*)22.922.722.721.821.319.319.118.9Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.310.19.59.08.68.27.97.7Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)8.68.235.532.6VAT gap (% of VAT total tax liability, VTTL) (**)2.63.03.96.67.0AustriaEU-27Progressivity & fairnessTax administration & complianceBy tax baseSome tax types 
 
 
   
 
  
 
 
 
incentives.  In  addition,  a  new  legal  form  for 
companies  has  been  created  specifically  to  meet 
the needs of venture capital investments. 

Austria  has  to  some  extent  lost  ground  in 
venture  capital  financing  but  introduced  tax 
incentives.  Compared  with  other  European 
countries, Austria ranks in the lower midfield, 15th 
out  of  24  EU  countries  (for  which  data  are 
available), with a below-average growth rate since 
2013. To counter this, Austria offers attractive tax 
incentives  to  support  venture  capital  investment, 
investment 
such  as  R&D 
allowances. 

incentives  and 

levels,  i.e.  for  single  persons  earning  the  average 
wage  (100%)  and  those  earning  50%,  67%  and 
167%  of  the  average  wage  (see  Graph  A2.2). 
Second earners earning 67% of the average wage, 
whose spouses earn the average wage, face a tax 
wedge higher than the EU average, although they 
are  taxed  only  slightly  more  heavily  than  single 
persons  at  the  same  wage  level.  Overall,  the  tax-
benefit  system  is  effective  in  reducing  income 
inequality. In 2023, it led to a reduction of the Gini 
coefficient  by  9  points,  whereas  the  EU  average 
reduction was at 7.7 points. 

Graph A2.2: Tax wedge for single and second 
earners, % of total labour costs, 2024 

Tax  compliance  in  Austria  is  perceived  as 
to  several 
somewhat  burdensome  due 
factors.  These  include  the  complexity  of  the  tax 
system,  high  tax  rates  and  strict  regulatory 
requirements. However, the country has introduced 
measures  to  simplify  tax  compliance,  such  as 
automatically filling in certain fields of taxpayers’ 
personal  income  tax  returns  using  information 
already  collected  or  available 
tax 
authorities. 

the 

to 

In Austria, income inequality is relatively low, 
but  wealth  is  highly  concentrated.  Effective 
tax rates for capital income and labour income are 
broadly  similar  in  Austria,  indicating  a  relatively 
balanced  treatment  of  these  two  sources  of 
income. Austria’s labour taxation income system is 
progressive. 

Austria’s  tax  regulations  include  a  20% 
deduction  scheme  for  employees  of  foreign 
companies.  The  scheme  provides  a  flat-rate 
professional  expenses  allowance  of  20%  on  an 
income 
subtracting 
preferentially taxed special payments and any tax-
free  remuneration  from  the  gross  income.  Austria 
also has specific scheme for artists. 

calculated  by 

that 

is 

Austria’s  tax-benefit  system  helps  reduce 
income inequality, but the labour tax  burden 
is  relatively  high  at  various  wage  levels.  In 
2024, the labour tax  wedge (78) was substantially 
higher  than  the  EU  average  at  various  income 

(78)  The  tax  wedge  is  defined  as  the  sum  of  personal  income 
social-security 
taxes  and  employee  and  employer 
contributions  net  of  family  allowances,  expressed  as  a 
percentage of total labour costs (the sum of the gross wage 
and social-security contributions paid by the employer). 

The tax wedge for second earner assumes a first earner at 
100% of the average wage and no children. For the full 
methodology, see OECD, 2016, Taxing Wages 2014-2015. 
Source: European Commission 

Austria’s  VAT  compliance  gap  is  relatively 
low and has decreased since the beginning of 
the  last  decade,  falling  from  10%  of  VAT  total 
tax  liability in 2010 to 2.8% in 2021. The cost of 
collection  ratio  in  Austria  has  remained  almost 
unchanged  since  2018  and  amounts  to  0.6%  of 
total revenue.  

On  tax  dispute  resolution,  there  were  39 
mutual  agreement  procedure  on  1 January 
2022.  In  2022,  15  new  cases  were  initiated  and 
11  were  closed.  There  seems  to  be  room  to 
improve  the  effectiveness  of  these  processes, 
which  is  also  necessary  to  comply  with  the 
requirements  of  the  Directive  on  tax  dispute 
resolution mechanisms in the EU (79)) 

(79)  Council Directive (EU) 2017/1852 of 10 October on tax 

dispute resolution mechanisms in the EU. 

35 

37.242.547.049.042.9202530354045505550100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - ATSingle earner - EU averageSecond earner -  ATSecond earner -  EU average 
 
   
 
PRODUCTIVITY 
ANNEX 3: INNOVATION TO BUSINESS  

the  European 

the  EU  average 

the  country’s  performance 
(116.3%),  but 

Austria  is  a  strong  innovator,  but  further 
efforts  are  required  to  foster  top-level 
research in emerging fields and breakthrough 
innovation,  and  more  risk  capital  is  needed 
to unlock business dynamism. According to the 
Innovation 
2024  edition  of 
Scoreboard (80), 
is 
above 
its 
performance  lead  is  shrinking  and  innovative 
activity 
lags  behind  the  best-performing  EU 
countries.  Austria’s  R&D  intensity  exceeds  the  EU 
average (2.24%) and reached 3.29% of the GDP in 
2023.  Dependence  on  medium  to  high-tech 
industries calls for further promotion of disruptive 
technologies  and  the  scaling  up  of  innovation  to 
renew  the  economic  fabric.  Moreover,  the  country 
shows 
the 
digitalisation  of  enterprises  and  the  uptake  of 
technologies.  Despite  a  favourable 
advanced 
situation  overall,  Austria’s 
innovation  support 
system can be improved, in particular in relation to 
fields, 
top-level 
in 
capital 
innovation 
breakthrough 
availability. 

emerging 
risk 
and 

limited  dynamism 

terms  of 

research 

in 

Science and innovative ecosystems 

While  Austria’s  public  R&D  intensity  (gross 
domestic  expenditure  on  public  R&D  as  a 
percentage  of  GDP)  has  increased  steadily 
over  the  past  decade,  scientific  excellence 
has  seen  a  relative  decline  over  time.  Public 
R&D  intensity  (1.01%  in  2023)  is  the  second 
highest  in  the  EU  and  evolved  favourably  during 
the  past  decade.  While  this  has  contributed 
ensuring  a  solid  public  research  base,  scientific 
excellence has declined moderately over time and 
needs  further  attention.  Scientific  publications  of 
Austria  within  the  top  10%  most  cited  scientific 
publications  worldwide  as  %  of  total  scientific 
publications of the country with 10.4% vs 11.4% a 
decade  ago,  is  just  above  the  EU  average  (9.6%) 
but  below  the  rate  of  innovation  leaders  such  as 
Belgium,  the  Netherlands,  Finland  and  Sweden. 

(80)  2024 European Innovation Scoreboard (EIS), country profile 

Austria. The EIS provides a comparative analysis of 
innovation performance in EU countries, including the relative 
strengths and weaknesses of their national innovation 
systems (also compared to the EU average). 

36 

Implementing  the  ‘Excellence  initiative’  is  a  major 
step  towards  promoting  top-level  research  and 
raising the impact of Austria’s research system. In 
research 
addition, 
excellence, 
is  a  need  for  continuous 
monitoring  and  evaluation  of  ongoing  policy 
actions  and  continued  improvements  of  research 
career prospects to attract and retain talent. 

strengthen  Austria’s 

there 

to 

Business innovation 

The  high  level  of  R&D  investments  does  not 
fully  translate  into  high-impact  innovation 
and  business  dynamism.  Business  enterprise 
expenditure  on  R&D  as  a  percentage  of  GDP  is 
well above the EU average (2.27% vs 1.49%) and 
is  concentrated  in  medium  to  high-tech  sectors 
such as mechanical engineering, metalworking and 
electrical  industries (81).  In  the  past  decade,  public 
support  for business  R&D  has  been  strengthened, 
mainly through increased R&D  tax incentives, and 
is  now  the  fourth  highest  in  the  EU.  However, 
despite  substantial  government  support  for  R&D, 
Austria’s  innovation  outputs  are  lower  than  one 
might  expect  from  its  level  of  innovation-related 
investments (82)  and  it  lags  behind  the  innovation 
leaders (83). There is a noticeable gap in innovation 
activities  between  large  companies  and  SMEs (84). 
Although  patenting  activity  remains  above  the  EU 
average,  it  has  been  steadily  decreasing  over  the 
past  decade (85).  This  has  acted  as  a  brake  on 
business dynamism: only 7.02% of Austrians were 
employed  in  fast-growing  enterprises  in  2020, 
against the EU average of 12.51%. Value added in 
high-tech  knowledge-intensive  services  as  a 
percentage  of  total  value  added  was  4.04%, 
against the EU average of 4.97% in 2023. 

(81)  Austrian Research and Technology Report 2024. 

(82)  Global Innovation Index 2024 Austria. 

(83)  The Innovation Output Indicator 2023. 

(84)  Technology & Innovation in Industry 4.0. 

(85)  Patent applications filed under the PCT per billion GDP (in 

PPS €) stood at 4.77 (EU average: 3.4) in 2020 compared to 
5.00 in 2015 and 5.3 in 2010. 

 
 
 
 
 
 
Graph A3.1: Patent applications filed under the PCT 
per billion GDP (in PPS €) in relation to R&D 
intensity (gross domestic expenditure on R&D as 
a percentage of GDP) 

Source: Eurostat, Fraunhofer data (PATSTAT) 

innovation 

in  emerging 
Expanding  R&D  capabilities 
technologies  is  necessary  to  achieve  high-
impact innovation. With its research, technology 
(RTI)  strategy  for  2030,  an 
and 
important  reform  measure  of  its  recovery  and 
resilience  plan,  Austria  aims  to  become  an 
international  innovation  leader  and  has  set  itself 
the goal of attracting 5-10 new RDI intensive lead 
companies  and  generating 
twice  as  many 
economically  successful  academic  spin-offs  by 
2030.  To  support  projects  that  might  lead  to 
future’ 
disruptive 
initiative (86) offers various programmes to support 
businesses, 
The 
particular 
implementation  of  the  policy  framework,  which 
includes  RTI-related  sub-strategies  such  as  the 
Austrian  2030  research  infrastructure  action  plan 
and a plan to promote public procurement through 
innovation,  will  require  strong  policy  coordination 
between  the  various  players  and  agile  funding 
mechanisms. 

innovation, 

‘expedition 

start-ups. 

the 

in 

While the adoption of digital technologies by 
Austrian  enterprises  is  close  to  the  EU 
average, 
their  adoption  of  advanced 
technologies is uneven. In 2024, SMEs in Austria 
had  a  similar  level  of  digitalisation  (72.22%)  as 
the  EU  average  (72.9%),  and  the  uptake  of 
artificial  intelligence  (AI)  technologies  by  Austrian 
businesses stood at 20.27% compared to 13.48% 
at  EU  level.  On  the  other  hand,  the  2023  data 
show that the adoption of cloud technologies and 
data  analytics  by  Austrian  businesses  remain 
relatively  low,  at  35.56%  vs  the  EU  average  of 
38.86% for cloud technologies and 23.94% vs the 

To 

further 

EU average of 33.17% for data analytics. Despite 
making  a  positive  contribution  to  the  EU’s  Digital 
Decade  targets,  Austria’s  digital  transformation 
lacks strong momentum as only 2-3% of Austrian 
companies  have  reached  the  highest  level  of 
digital  maturity (87). 
advance 
digitalisation,  Austria  is  making  use  of  both 
national  and  EU-level  initiatives,  including  the 
SME.DIGITAL programme, partly funded via RRF in 
the  years  2020-2023.  This  programme  supports 
SMEs  by  helping  them  develop  digitalisation 
strategies  and  providing  financial  support  for  the 
implementation  of  digital  investments.  A  new 
SME.DIGITAL  scheme  aims  to  facilitate  the  green 
transition by supporting digitalisation projects that 
contribute  to  environmental  sustainability.  Austria 
innovation 
is  also  strengthening 
ecosystem  through  European  Digital  Innovation 
Hubs (EDIHs). By the end of 2022, four EDIHs had 
been  set  up  under the  Digital  Europe  programme, 
complementing  national  structures  and  creating 
opportunities 
industry 
partnerships  in  areas  such  as  AI,  cybersecurity, 
blockchain, big data and Industry 4.0. 

its  digital 

research 

and 

for 

to 

linkages 

Austria  needs  to  exploit  its  well-established 
science-business 
drive 
breakthrough  innovation  and  close  the  gap 
with European innovation leaders and the US. 
Austria ranks first among EU countries as regards 
the  number  of  public-private  scientific  co-
publications  as  a  percentage  of  the  total  number 
of publications (16% vs an EU average of 7.7% in 
2023). Furthermore, the transfer of knowledge and 
technology  from  research  institutes  to  firms  has 
received  positive  assessments,  with  high  mobility 
between  the  two  sectors  and  strong  knowledge 
absorption  by  firms (88).  Austria’s  R&D  tax  credit 
has  been  specifically  designed  to  favour  science-
industry collaboration. While the existing networks 
and  schemes  effectively  contribute  to  science-
industry  links,  they  often  focus  on  incremental 
innovation. 
COMET 
(Competence  Centres  for  Excellent  Technologies) 
programme,  which  supports  the  application  of 
science,  is  an  important  funding  source  as  it 
focuses  on  key  technologies  that  are  of  strategic 
In 
importance 
addition  to  expanding  the  already  established 
framework  and  strengthening  programmes  that 

to  Austria’s  competitiveness. 

respect 

that 

the 

In 

(86)  Expedition Future | FFG. 

(87)  Technology & Innovation in Industry 4.0. 

(88)  OECD Economic Surveys: Austria 2024. 

37 

BEBGCZDKDEEEIEELESFRHRITCYLVLTLUHUMTNLATPLPTROSISKFISE0123456780.511.522.533.5Patent applications filed under PCT per billion GDP (in PPS€), 2022R&D Intensity (GERD as % of GDP), 2023 
          
 
 
have proved their worth, specific attention must be 
paid to breakthrough innovation and to promoting 
a  more  entrepreneurial  culture.  Facilitating  the 
application of SME research results is also an area 
that can bring further opportunities. 

Financing innovation 

Graph A3.2: Venture capital (market statistics) as 
a percentage of GDP, 2023 total 

to 

the 

The 
limited  availability  of  risk  capital 
funding  holds  back  business  dynamism  and 
the  scalability  of  Austrian  start-ups.  For 
years, Austria’s risk capital intensity has remained 
below  international  levels,  as  the  funding  of 
companies  is  heavily  orientated  towards  bank 
loans  and  equity  financing  is  low  by  international 
standards (89).  While  venture  capital  intensity (90) 
has been substantially higher in recent years than 
in  the  pre-COVID  period  (increasing  from  0.022% 
in  2019  to  0.074%  in  2023),  it  still  remains 
slightly  below  the  EU  average  (0.078%) (91)  and 
well  behind  the  international  leaders  in  this  area 
such as Estonia (0.335%), Denmark (0.156%) and 
Sweden  (0.141).  Limited  venture  capital  financing 
is  partly  due 
low  participation  of 
institutional investors, including pension funds. The 
2024  OECD  Economic  Survey  of  Austria  suggests 
that  it  would  benefit  from  revising  corporate 
taxation  elements  that  disincentivise  investment 
financed  by  equity,  and  from  increased  use  of 
state-backed ‘funds of funds’. Austria has already 
introduced some measures (92) in this regard, such 
as  the  ‘Gründungsfonds  II:  Startup  Fund’,  a  10-
year state-financed venture capital fund for start-
ups  with  a  high  growth  potential  and  scalable 
business  models,  and  ‘Pre-seed  /  Seed  financing’ 
to  promote  technology  and  knowledge-intensive 
start-ups. 
to  monitor  these 
measures and evaluate their effectiveness. Further 
efforts  are  needed  to  reach  Austria’s  venture 
capital intensity  target of 0.1% by 2030 given its 
stagnation between 2021 and 2023. (See Annex 5 
on access to finance). 

important 

is 

It 

(89)  OECD Economic Surveys: Austria 2024. 

(90)  Venture capital investment as % of GDP. 

(91)  Data used from Invest Europe using a three-year moving 

average to reduce volatility. 

Source: Invest Europe 

Innovative talent 

that 

they  felt 

The  shortage  of  skilled  workers  negatively 
affects  Austria’s  capacity  to  innovate.  As  a 
result of the skilled labour shortage, in 2021 51% 
their 
of  companies  reported 
possibilities  of  innovating  and  developing  new 
products  were  restricted (93).  According  to  the 
Chamber of Commerce, the shortage of IT experts 
in  particular  is  a  major  obstacle  for  companies, 
holding  back  the  country’s  digital  transition  (see 
also  Annex  10).  The  number  of  new  graduates  in 
science  and  engineering  per  thousand  population 
aged  25-34  has  been  decreasing  over  the  past 
decade. In response to this, also as part of its RTI 
Strategy  Austria  adopted  a  STEM  action  plan 
aiming  to  increase  the  proportion  of  science, 
and  mathematics 
technology, 
graduates by 20 % and increase the proportion of 
women graduates in technical subjects by 5 % by 
2030 (see also Annex 12). 

engineering 

Notable  efforts  have  been  made  to  increase 
and  strengthen  entrepreneurship  education 
remain  highly 
in  Austria,  but  policies 
segmented  between  educational  levels.  In 
school  education,  various  institutions  are  working 
together  to  improve  entrepreneurship  education, 
whereas in the new 2023/24 curricula for primary 
and  lower  secondary  schools,  entrepreneurship 
training is included as a  cross-curricular theme to 
be  covered  under  various  subjects.  At  the  same 
institutions  are  also 
time,  higher  education 

(92)  Austria Wirtschaftsservice - AWS. 

(93)  Demand for/Lack of Skilled Labour in Austria in 2021. 

38 

00.050.10.150.20.250.30.35EEDKSEFIDEATEU 
 
          
 
increasing  their  offer  of  entrepreneurship  training 
and  encouraging  start-ups.  Over  the  last  three 
years,  16%  of  all  start-ups  were  spin-offs  in  the 
course  of  academic  training  and  7%  were  spin-
offs  from  academic  employment.  Despite  these 
ongoing  efforts,  entrepreneurship  education  is 
highly  segmented  between  education  levels  and 
there is a lack of monitoring and direct evaluation 
of the quality of entrepreneurship education. 

39 

 
Table A3.1:  Key innovation indicators 

(1) EU average for the last available year or the year with the highest number of country data. 
Source: Eurostat, DG JRC, OECD, Science-Metrix (Scopus database), Invest Europe, European Innovation Scoreboard 

40 

R&D intensity (gross domestic expenditure on R&D as % of GDP)2.933.073.213.263.183.29:2.243.45Public expenditure on R&D as % of GDP0.850.910.9610.971.01:0.720.64Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 1111.410.410.4:::9.612.3Researchers (FTEs) employed by public sector (Gov+HEI) per thousand active population3.43.94.24.44.64.9:4.2:International co-publications as % of total number of publications57.663.567.16868.368.8:55.939.3Business enterprise expenditure on R&D (BERD) as % of GDP2.072.152.232.242.192.27:1.492.7Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP:0.63:0.64:::0.40.3Researchers employed by business per thousand active population5.66.77.488.38.8:5.7:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)4.954.84.23.9::2.8:Employment share of high-growth enterprises measured in employment (%)9.568.617.02::::12.51:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::67.32:72.2272.91:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%):::::23.94:33.17:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%):::28.76:35.56:38.86:Artificial intelligence adoption% enterprises (EU Digital Decade target by 2030: 75%):::8.83:10.7920.2713.48:Public-private scientific co-publications as % of total number of publications12.814.514.815.615.616:7.78.9Public expenditure on R&D financed by business enterprise (national) as % of GDP:0.054:0.063:::0.050.02Total public sector support for BERD as % of GDP:0.261:0.339:::0.2040.251 R&D tax incentives: foregone revenues as % of GDP0.1810.1620.2750.2190.170::0.1020.141BERD financed by the public sector (national and abroad) as % of GDP :0.099:0.120:::0.1000.110Venture capital (market statistics) as % of GDP, total (calculated as a 3-year moving average)0.0190.0250.0210.0730.0790.074:0.078:Seed stage funding share (% of total venture capital)12.8024.98283.11632.31.92.6:7.3:Start-up stage funding share (% of total venture capital)42.36638.04641.08914.918.41521.663:44.02:Later stage funding share (% of total venture capital)44.83256.97155.79582.8279.69375.742:48.69:New graduates in science and engineering per thousand population aged 25-3416.218.419.419.218.1::17.6:2023EU average (1)USA2024Headline indicatorScience and innovative ecosystemsR&D investment & researchers employed by businessesPublic support for business innovationInnovation outputsDigitalisation of businessesAcademia-business collaborationFinancing innovationBusiness innovation enablers: Innovative talent20222021Austria201220172020 
 
 
 
 
        
 
ANNEX 4: MAKING BUSINESS EASIER 

Skills  shortages  are  a  major  obstacle  to 
investment,  while  a  high  administrative  and 
regulatory  burden,  low  business  dynamism, 
and  regulatory  restrictiveness  in  services 
hold productivity growth back. In addition to a 
lack  of  skilled  labour,  energy  costs  and  economic 
uncertainty,  access  to  finance  continues  to  be  a 
barrier  hampering  the  creation  and  growth  of 
innovative  companies  (see  the 
start-ups  and 
Capital  Markets,  Financial  Stability  and  Access  to 
Finance  Annex).  Further 
include 
Austria’s  low  enterprise  birth  rate  in  combination 
low  use  of  venture  capital,  while 
with  a 
insolvencies  are  on  the  increase.  The  country 
remains  among  the  most  restrictive  Member 
States in terms  of  services,  including  professional 
services  and  retail  operations,  with  room  for 
improvement  also  seen  for  other  Single  Market 
indicators. 

challenges 

Economic framework conditions 

in  private 

The challenging economic situation has led to 
reductions 
investment.  Weak 
demand from abroad is hitting industries hard. As 
their  production 
to  adapt 
businesses  have 
processes to the changed conditions on the energy 
market  and  to  facilitate  their  green  and  digital 
transition,  substantial  public  investment  will  be 
required (94).  The  perceived 
investment  gap 
reported  by  companies  in  Austria  is  slightly  lower 
than the EU average, with 12% of firms reporting 
three  years 
underinvestment  over 
(compared  with  an  EU  average  of  14%) (95). 
Austria’s foreign direct investment (FDI) stock has 
stagnated at around 40% of GDP, with FDI mainly 
reflecting 
towards  service  activities, 
directed 
Austria’s  role  as  a  regional  hub  for  multinational 
enterprises (96). 

the  past 

A  lack  of  skilled  labour  is  seen  as  the  main 
obstacle  to  investment (97).  According  to  the 
EIB  Investment  Survey  2024,  86%  of  Austrian 

to 

impediment 

companies  considered  the  lack  of  availability  of 
investment. 
skilled  staff  an 
However,  the  share  of 
industrial  companies 
reporting  shortages  as  a  factor  limiting  their 
production  has  fallen  below  the  EU  average 
(11.2% vs an EU average of 20.2%). Nevertheless, 
labour and skills shortages overall are increasingly 
becoming a barrier to growth, in particular due to 
population ageing (98). One of the highest vacancy 
rates  in  the  EU,  an  increasing  part-time  rate  for 
men  and  women  and  a  comparatively 
low 
employment  rate  of  older  people  have  further 
aggravated  shortages  in  many  sectors  (99).  In  the 
medium and long term, the available labour supply 
also  depends  on  migration,  which  can  help 
alleviate 
increase  Austria’s 
innovation  potential (100).  There  are  also  specific 
shortages  in  the  IT  sector,  with  the  lack  of  IT 
professionals  often  seen  by  managers  as  the 
biggest hurdle in the digitalisation and data back-
up of businesses and 57% of businesses reported 
a shortage of IT specialists (101). 

shortages  and 

Energy  costs  and  uncertainty  about  the 
future  are  also  identified  as  obstacles (102), 
while  material  shortages  are  decreasing. 
Particularly  energy-intensive  industries  have  felt 
the  burden  of  energy  costs  on  business  revenues 
since  the  energy  crisis  (see  also  the  Affordable 
Energy  Transition  Annex).  However,  the  share  of 
businesses  facing  material  supply  constraints  has 
decreased and is now below the EU average. 

Availability  of  finance  remains  an  obstacle 
to 
investment  and  hampers  business 
dynamism.  The  share  of  Austrian  business 
reporting  this  as  an  obstacle is  slightly  above  the 
EU  average  (47%  vs  45%) (103).  A  low  use  of 
venture  capital  is  hampering  the  creation  and 
growth  of  innovative  and  deep-tech  companies 

(98)  European  Investment  Bank,  2024,  EIB  Investment  Survey 

2024, Eib.org. 

(99)  European  Investment  Bank,  2024,  EIB  Investment  Survey 

2024, Eib.org. 

(100) Austrian Productivity Board,2024, Productivity Report, 

(94)  Austrian Productivity Board, 2024, Productivity Report, 

Produktivitaetsrat.at. 

Produktivitaetsrat.at. 

(101) Initiative Future Business Austria, 2024, Österreichischer 

(95)  European  Investment  Bank,  2024,  EIB  Investment  Survey 

Infrastrukturreport 2025, Ffg.at. 

2024, Eib.org. 

(102) European Investment Bank, 2024, EIB Investment Survey 

(96)  OECD, 2023, FDI Qualities Review of Austria, Oecd.org. 

2024, Eib.org. 

(97)  European  Investment  Bank,  2024,  EIB  Investment  Survey 

(103) European  Investment  Bank,  2024,  EIB  Investment  Survey 

2024, Eib.org. 

2024, Eib.org. 

41 

 
 
 
 
 
and  particularly  affects  start-ups  and  SMEs (see 
the  Innovation  to  Business  Annex).  With  business 
financing  heavily  skewed  towards  bank  loans, 
capitalisation  of  domestic  companies  is  low  in 
international comparison (104) (see also the Capital 
Markets,  Financial  Stability  and  Access  to  Finance 
Annex).  Better  access  to  venture  capital, 
in 
particular seed and early-stage funding, could help 
translate  investments  in  research  and  innovation 
into  higher  business  growth  and  productivity  (see 
the  Innovation  to  Business  Annex).  In  terms  of 
advanced  manufacturing,  there  has  been  a  shift 
away  from  Austria's  role  as  a  leading  destination 
for venture capital investments due to the growing 
relevance of Germany as a hub in this sector (105). 

Graph A4.1: Making Business Easier: selected 
indicators.* 

increased 

actual  payment  times  for  payments  from  the 
to  18.1  days, 
public  sector  has 
surpassing the EU average of 15.2 days. The share 
of  SMEs  reporting  late  payments  from  public 
entities was also slightly above the EU average in 
2024  (16.9%  vs  16.6%).  However,  the  share  of 
SMEs reporting late payments from private entities 
was  below  the  EU  average  (42.6%  vs  47.9%). 
Furthermore, in 2024 Austria had a comparatively 
small payment gap for private sector/business-to-
business payments, with an average of 13.7 days, 
below the EU average of 15.5 days. 

infrastructure  as  obstacles 

Austrian  firms'  perceptions  of  transport  and 
digital 
to 
investment  are  higher  than  the  EU  average. 
Nearly  half  (49%)  of  Austrian  businesses  identify 
transport  infrastructure  as  an  obstacle,  with  16% 
considering it as a major obstacle, which is above 
the EU averages of 45% and 13.4%, respectively. 
the  country’s  digital 
In  addition,  50%  see 
infrastructure as negatively impacting investment, 
which  is  also  higher  than  the  EU  average,  which 
stands at 41% (106). 

in  gigabit 

lags  behind 

A  mixed  picture  for  digital  infrastructure. 
While  5G  deployment  is  progressing  well,  the 
country 
infrastructure, 
ranking among the lowest in the EU for very high-
(VHCN)  coverage.  However, 
capacity  network 
recent  developments 
improving 
outlook,  bringing  Austria  closer  to  the  Digital 
Decade targets. 

indicate  an 

Austria  has  made  significant  progress  in 
expanding VHCNs but still lags behind the EU 
average.  VHCN  coverage  in  Austria  stands  at 
67.6%  (compared  to  78.8%  in  the  EU),  with  rural 
coverage particularly low at 35.8% (against the EU 
average of 55.6%). However, Austria recorded one 
of  the  highest  year-on-year  increases  in  the  EU 
between 2022 and 2023, with a +23.3% growth in 
coverage  (+12.8  percentage  points),  indicating  a 
positive trend towards closing the gap with the EU 
average.  To  accelerate  broadband  deployment, 
Austria  is  implementing  the  Broadband  Austria 
2030 initiative, which is a key measure under the 
roadmap. 
country’s  Digital  Decade  strategic 
Gigabit  connectivity is  a  national  priority,  and  this 
initiative  accounts  for  40%  of  the  total  budget 
presented  in  the  roadmap,  fully  funded  through 

(106) European  Investment  Bank,  2024,  EIB  Investment  Survey 

2024, Eib.org. 

Share of (1) enterprises, (2) average intra-EU exports and 
imports in GDP, (3) firms, (4) SMEs. 
* Q4 data on trade integration is not yet available 
Sources: (1) EIB IS, (2) Eurostat, (3) ECFIN BCS, (4) SAFE 
survey. 

Delays  for  payments  from  the  public  sector 
have  increased.  The  gap  between  agreed  and 

(104) Austrian Productivity Board, 2024, Productivity Report, 

Produktivitaetsrat.at. 

(105) European Commission Joint Research Centre, 2024, Strategic 
Insights into the EU’s Advanced Manufacturing Industry: 
Trends and Comparative Analysis, 2024, Jrc.ec.europa.eu. 

42 

42.616.9837.746.847.916.610.041.624.50.010.020.030.040.050.060.0from private entitiesfrom public entitiesMaterial shortages as afactor limiting productionEU Trade IntegrationRegulation as a majorobstacle to investment(4) Late payments(3) Shortages(2) SingleMarket(1) RegulatoryburdenShare (%)EU27AT 
       
 
 
Austria’s  recovery  and  resilience  plan.  Austria  has 
committed  to  reaching  100%  VHCN  coverage  by 
2030, in line with the EU’s Digital Decade targets. 
Ensuring  rural  connectivity  will  be  particularly 
challenging  due  to  the  country’s  mountainous 
targeted  measures  within 
geography,  but 
Broadband  Austria  2030  are  designed  to  bridge 
the urban-rural digital divide. 

5G coverage in the country is well above the 
EU  average.  It  has  reached  96.0%  compared  to 
the  overall  EU  figure  of  89.3%.  However,  the 
annual growth rate in 5G coverage (4.7%) is below 
the EU average (9.8%), reflecting Austria’s already 
high coverage level, where the remaining gaps are 
more difficult to close. 

is  also 

capability 

reinforcing 

development, 

Austria 
its  digital 
resilience  through  its  national  cybersecurity 
strategy, which focuses on decentralised resource 
and 
allocation, 
international  cooperation.  Austria  has  well-
established  cybersecurity  structures,  including  the 
Operational  Coordination  Structure 
(OpKoord), 
IKDOK, the Cyber Security Steering Group, and the 
Cyber  Security  Platform,  which  will  be  further 
strengthened. In 2024, the country saw a decrease 
in the number of businesses reporting ICT security 
incidents  caused  by  external  cyberattacks,  falling 
from 3.4% of firms in 2022 to 2.02%. 

Reduction of regulatory and 
administrative barriers 

Austria  has  a  high  administrative  and 
regulatory burden. The country is ranked as less 
competition-friendly for this metric than the OECD 
average (107). Business regulation is also seen as a 
greater  obstacle  to  investment  than  the  EU 
average.  According  to  the  EIB  Investment  Survey, 
this is reported as an issue by 75% of businesses 
(EU  average  66%).  46.8%  even  consider  this  a 
major  obstacle,  which  is  considerably  higher  than 
the EU average of 24.5% (108). Austrian companies 
have  also  spent  more  time  and  more  money  on 
bureaucracy  during  the  past  five  years  than 

previously,  according  to  the  Austrian  Chamber  of 
Commerce (109).  However,  while 
licensing  and 
permits  may  be  seen  as  comparatively  less 
cumbersome (110),  administrative  and  regulatory 
constraints  can  still  hamper  faster  progress  in 
significant  areas  such  as  the  deployment  of 
renewables.  While  efforts  to  simplify  procedures 
have  been  adopted,  such  as  the  Renewables 
Expansion  Act  and  an  amendment  of 
the 
Environmental  Impact  Assessment  Act,  the  far-
reaching  powers  of  federal  states  in  areas  like 
spatial  planning  and  zoning  can  lead  to  complex 
requirements and differing procedures. 

Austria's  development 
in  digital  public 
services  and  e-government  is  positive.  While 
Austria performs around the EU average in digital 
public services for citizens, there is more untapped 
potential 
for  businesses. 
However,  the  mobile-friendliness  of  Austria’s 
digital  public  services  stands  out  at  the  EU 
level (111) 
Institutional 
Framework Annex). 

in  public  services 

Effective 

(see 

the 

Amid  an  increase  in  insolvencies,  Austria 
would  benefit 
from  greater  business 
dynamism to boost the efficient allocation of 
resources  and  productivity  growth.  In  2024 
there  was  a  surge  of  insolvencies  with  the  
Austrian  credit  protection  association  KSV1870 
reporting  that  6 550  companies  had  to  file  for 
insolvency  in  2024,  which  is  22%  more  than  the 
previous year, averaging 18 bankruptcies per day. 
Particularly  affected  were  retail,  the  construction 
industry  and  the  hospitality  and  accommodation 
sector (112).  At  the  same  time,  the  business 
environment  generally  suffers  from  a  very  low 
level  of  dynamism.  Austria’s  enterprise  birth  rate 
tends  to  be  one  of  the  lowest  in  the  EU,  and  the 
rate  of  company  closure  is  also  among  the 
lowest (113).  However,  despite  the  challenging 
economic climate, 2024 saw a very positive trend 
in terms of start-ups, with a record of 36 673 new 

(109) Austrian Economic Chamber, 2024, Standortfaktor 

Bürokratie, Wko.at. 

(110) OECD, 2024, Product market regulation – country note 

Austria, 2024, Oecd.org. 

(111) European Commission, 2024, Digital Decade Country Report 

Austria, Ec.europa.eu. 

(107) OECD, 2024, Product market regulation – country note 

Austria, 2024, Oecd.org. 

(112) KSV1870, 2024, Insolvenzschub mit Sogwirkung: 
Firmenpleiten steigen um 22 Prozent, Ksv.at. 

(108) European Investment Bank, 2024, EIB Investment Survey 

(113) European Commission, 2024, Business demography 

2024, Eib.org. 

statistics, Ec.europa.eu. 

43 

 
 
 
companies  registered,  46.0%  of  them  founded  by 
women (114). In terms of its insolvency procedures, 
Austria  still  lags  behind  other  countries  for  the 
speed  of  starting  and  resolving  proceedings, 
according  to  the  OECD (115).  However,  Austria  has 
the  EU  Directive  on 
already 
Restructuring and Insolvency into national law (116). 

transposed 

Against  the  backdrop  of  low  dynamism  and 
young  innovative  companies  and  start-ups 
struggling with liquidity, Austria has adopted 
a  start-up  package  as  part  of  its  recovery 
and  resilience  plan.  This  package  included  the 
introduction  of  the  new  legal  form  of  ‘flexible 
company'  (FlexKapG).  It  aims  to  cater  to  the 
specific  needs  of  start-ups  and  other  innovative 
companies by reducing the minimum share capital 
at the time of incorporation as well as by reducing 
the  minimum  corporation  tax  by  over  70%  (see 
also  the  Capital  Markets,  Financial  Stability  and 
Access to Finance Annex). Early evidence indicates 
significant  take-up  of  these  new  options.  In  the 
first  year  since  its  introduction,  784  'flexible 
companies'  had  already  been  established, 
benefiting  from  the  legal  advantages  offered  by 
this corporate structure. After five years, the total 
number of Flexible Companies is expected to reach 
7 500. 

tax 

rates, 

country 

rigorous 
the 

Tax  compliance  in  Austria  is  perceived  as 
somewhat  burdensome.  This  is  due  to  various 
factors, including the complexity of the tax system, 
regulatory 
high 
and 
requirements.  However, 
has 
implemented measures to simplify tax compliance, 
such as the automatic filling in of certain fields of 
taxpayers’  private  income  tax  (PIT)  returns  with 
information  already  collected  or  accessible  to  the 
tax authorities. The share of e-filing for PIT returns 
steadily  increased  to  almost  88.1%  in  2022. 
Austria’s tax collection efficiency is relatively high, 
with  a  cost  of  collection  ratio  of  0.6%  of  total 
revenue  in  2022.  On  the  tax  compliance  and 
evasion issues, it should be noted that Austria only 
has a comparatively small shadow economy (117). 

Single Market 

Austria  is  a  small,  open  and  diversified 
economy  which  is  strongly  integrated  into 
the  Single  Market.  Intra-EU  trade  stood  at 
37.7%  of  GDP  in  2024,  slightly  below  the  EU 
average. However, EU Member States, in particular 
Germany, remain among Austria’s most important 
trading  partners.  Germany  is  also  the  biggest 
investor  in  the  country (118).  Despite  Austria’s 
export  industry  having  suffered  worsening  price 
competitiveness in recent years, foreign trade has 
proved  resilient,  due  to  the  high  complexity  and 
knowledge-intensity  of  Austrian  exports (119).  77% 
of  Austrian  firms  either  imported  and/or  exported 
goods and/or services (within the Single Market or 
beyond),  according  to  the  EIB  Investment  Survey, 
considerably  above  the  EU  average  of  63% (120). 
While Austria’s export figures have been declining 
since  the  2008/2009  financial  crisis,  albeit  to  a 
slightly  more  moderate  extent  than  the  EU 
average,  the  economy  has  continued  to  steadily 
integrate into global supply chains (121). 

the 

sector 

services 

services 

Nevertheless,  Austria's 
trade 
restrictiveness remains among the highest in 
the  EU.  More  than  the  EU  average,  the  Austrian 
economy is dominated by the production of goods, 
with 
a 
comparatively  low  share  of  value  added.  High 
growth  knowledge-intensive  services  only  account 
for a relatively small part of this sector (122). While 
framework  provides 
the  overall 
in  services, 
favourable  conditions  for 
restrictions remain in several policy areas. In terms 
of  sectors,  courier  services  are  the  most  open 
sector  in  Austria,  while  engineering  services  are 

contributing 

regulatory 

trade 

(118) Federal Ministry of Labour and Economy, Bilateral economic 

relations with Europe, Bmaw.gv.at. 

(119) Austrian Productivity Board,2024, Productivity Report, 

(114) Austrian Economic Chamber, 2025, Factsheet Gründen und 

Produktivitaetsrat.at. 

Startup, WKO.at. 

(120) European Investment Bank, 2024, EIB Investment Survey 

(115) OECD, 2024, Economic Surveys: Austria, Oecd.org. 

2024, Eib.org. 

(116) OECD, 2022, Enhancing insolvency frameworks to support 

(121) Austrian Productivity Board,2024, Productivity Report, 

economic renewal, Oecd.org. 

Produktivitaetsrat.at. 

(117) JKU/IAW, 2024, Die Größe der Schattenwirtschaft – Methodik 

(122) Austrian Productivity Board,2024, Productivity Report, 

und Berechnungen für das Jahr 2024. 

Produktivitaetsrat.at. 

44 

 
 
 
the  most  restricted  when  compared  with  other 
countries (123). 

resolution cases it handled as lead centre in 2024 
(compared to an EU average of 84.9%) (128). 

that 

OECD 

found 

The 
regulatory 
restrictiveness  was  higher  in  Austria  than 
the  EU  average  for  regulated  professions, 
such  as  civil  engineers,  accountants,  and  real 
estate  agents (124).  Access  barriers  and  restrictive 
rules  include  extensive  reserved  activities  and 
interdisciplinary restrictions (125).  

Austria  remains  among  the  most  restrictive 
Member  States  for  retail  operations.  Market 
entry,  which  is  already  difficult  due  to  high 
investment  costs  and  oversaturation  is  further 
hindered  by  stringent  establishment  rules (126).  In 
2023,  the  Austrian  Federal  Competition  Authority 
also pointed to high market concentration as well 
as  higher  prices  compared  to  other  countries, 
which 
territorial  supply 
constraints (127). 

result 

could 

from 

Other key Single Market indicators also show 
considerable  room  for  improvement.  Austria’s 
transposition  and  conformity  deficits  of  Single 
Market  directives  are  clearly  higher  than  the  EU 
averages.  The  percentage  of  directives  not 
transposed  in  a  timely  manner  (transposition 
deficit)  increased  to  1.2%,  which  is  above  the  EU 
average  of  0.8%  and  takes  Austria  another  step 
away  from  reaching  the  0.5%  target  proposed  in 
the  Single  Market  Act.  The  conformity  deficit  (i.e. 
the  percentage  of  all  directives 
transposed 
incorrectly) also slightly increased to 1.5% in 2024 
(EU  average  0.9%).  The  number  of  infringement 
cases is also higher than the EU average (although 
their duration is a bit shorter). In addition, Austria 
has  solved  79.8%  of  the  SOLVIT  EU  rights 

Public procurement 

On public procurement, Austria is an average 
performer  overall.  The  percentage  of  contracts 
awarded  after  just  one  bid  was  submitted  was 
28%  in  2023.  Furthermore,  the  rate  of  direct 
awards at 11% in 2024 surpassed the EU average, 
which constitutes an increase compared to 2023. 

has 

Austria 

developed 

To  strategically  leverage  the  approximately 
18% of GDP that Austria spends annually on 
public  procurements (129),  the  country  has 
become a frontrunner in terms of innovation 
procurement. 
a 
competence  centre  (IÖB)  that  is  integral  to  its 
research  and 
innovation  policy.  The  country 
supports innovation in public procurement through 
tools 
like  a  marketplace  for  challenges,  a 
catalogue  of  criteria,  training  programmes,  and 
funding,  alongside  ex post  evaluations  of  the 
competence  centre’s  effectiveness.  In  addition, 
Austria aims to promote socially responsible public 
in  the 
procurement,  which 
country’s social partnership system (130). 

is  also  anchored 

To reduce the environmental impact of public 
procurement,  the  government  published  an 
action  plan  on  green  public  procurement 
(GPP) in 2021.  It aims to offer the public sector 
the necessary support for sustainable procurement 
and strives to serve as a model for the responsible 
and  careful  use  of  resources  to  protect  the 
environment and offer future generations a future 
to  objectives  and 
worth 
measures, the plan contains a set of criteria for 16 
procurement groups (131). 

In  addition 

living. 

(123) OECD, 2024 Services Trade Restrictiveness Index (STRI), 

Oecd.org. 

(124) OECD, 2024, Product market regulation – country note 

(128) European Commission, Single Market and Competitiveness 

Austria, 2024, Oecd.org. 

Scoreboard, Ec.europa.eu. 

(125) European Commission, 2021, Communication on updating 
the reform recommendations for regulation in professional 
services, COM(2021)385. 9/7/2021, Eur-lex.europa.eu. 

(126) European Commission, 2022, Retail restrictiveness indicator 

(2022 update), Ec.europa.eu. 

(129) Austrian Parliament, 2023, Fachinfos- Fachdossiers, 

Nachhaltige öffentliche Beschaffung, Parlament.gv.at. 

(130) Federal Ministry of Justice, 2024, Bericht der Republik 

Österreich gemäß den Richtlinien 2014/23/EU, 2014/24/EU 
und 2014/25/EU für den Zeitraum 2021 bis 2023. 

(127) Austrian Federal Competition Authority (AFCA), 2023, Final 

report on sector Inquiry, Bwb.gv.at. 

(131) Federal Ministry of Justice, 2021, National Action Plan to 
promote sustainable public procurement, Bmj.gv.at. 

45 

 
 
 
Table A4.1:  Making Business Easier: indicators. 

*Change in methodology in 2024: reporting late payments from public and private entities separately. 
**The 2024 data on single bids is provisional and subject to revision. Please note that approximately 80% of the total data is 
currently missing, which may impact the accuracy and completeness of the information. Due to missing data, the EU average of 
direct awards data is calculated without Romania. 
Sources: (1) ECFIN BCS, (2) Eurostat, (3) EIB IS, (4) Digital Decade Country reports, (5) Intrum Payment Report, (6) SAFE survey, 
(7) OECD, (8) up to 2023: Single Market and Competitiveness Scoreboard, 2024: Public procurement data space (PPDS). 

46 

POLICY AREA20202021202220232024EU-27 average5.028.335.213.38.310.07.014.521.318.011.220.23.34.86.45.64.62.311.920.128.212.816.013.4-45.454.867.6-78.8-26.636.641.0-64.0-76.891.796.0-89.3Regulatory environment29.235.426.130.246.824.514.011.713.616.613.715.612.211.813.715.418.115.1from public or private entities in the last 6 months30.430.432.342.1--from private entities in the previous or current quarter----42.647.9from public entities in the previous or current quarter----16.916.634.638.342.339.737.741.60.0540.0540.0540.0540.0620.0501.21.91.01.01.20.81.91.51.21.41.50.975.874.471.970.079.884.935.029.027.024.026.024.42225292836-131078117.0AustriaINDICATOR NAMEInvestment climateShortagesMaterial shortage, firms facing constraints, %1Labour shortage, firms facing constraints, %1Vacancy rate, vacant posts as a % of all available ones (vacant + occupied)2InfrastructureTransport infrastructure as an obstacle to investment, % of firms reporting it as a major obstacle3VHCN coverage, %4FTTP coverage, %45G coverage, %4Reduction of regulatory and administrative barriersImpact of regulation on long-term investment, % firms reporting business regulation as a major obstacle3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment5Payment gap - public sector, difference in days between offered and actual payment5Share of SMEs experiencing late payments, %*6Single MarketIntegrationEU trade integration, % (Average intra-EU imports + average intra EU exports)/GDP2EEA Services Trade Restrictiveness Index7ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, % resolution rate per country8Number of pending infringement proceedings8Competition and transparency in public procurementSingle bids, % of total contractors**8Direct awards, %**8Public procurement 
 
 
 
       
 
ANNEX 5: CAPITAL MARKETS, FINANCIAL STABILITY AND ACCESS TO FINANCE 

savings  are 

The  Austrian  economy  is  supported  by  high 
domestic  savings,  significant  net  foreign 
assets, as well as resilient banking and non-
banking  financial  sectors.  Austrian  firms  rely 
more on funding by banks and less on the capital 
markets,  as  compared  with  their  European  peers. 
The capital markets remain comparatively small in 
terms  of  capitalisation  and  volumes  traded. 
invested 
Austrian  households’ 
conservatively,  as  financial  instruments  form  only 
a  small  part  of  their  wealth.  The  investment 
portfolio  of  domestic  institutional  investors  is 
focused  on  debt  securities  and  investment  fund 
shares.  The  local  venture  and  growth  capital 
market  is  not  yet  sufficiently  developed  to  meet 
all the financing needs of innovative firms. At the 
same  time,  Austria  has  increasingly  supported 
efforts to develop the Capital Markets Union (CMU) 
in  the  EU.  Austria’s  recovery  and  resilience  plan 
(RRP)  also  includes  measures  to  support  the 
improve  financial 
financing  of  start-ups  and 
literacy. 

Availability and use of domestic 
savings  

The  Austrian  economy  invests  the  largest 
part  of  its  net  savings  domestically.  From 
2014  until  2023,  the private  savings  ratio,  net  of 
fixed  capital  consumption,  stood  on  average  at 
8.8%  of  GDP,  reaching  a  maximum  of  15.4%  in 
2020 (see Graph A5.1). The net private investment 
ratio,  which  denotes  the  net  contribution  of  the 
private  sector  to  capital  accumulation  in  the 
economy,  recorded  an  average  of  4.7%  of  GDP 
during  the  reference  ten-year  period  and  reached 
6.6% in 2022. At the same time, during the same 
period 
running 
the  government  has  been 
budgetary  deficits  and  a  few  relatively  small 
surpluses,  which  during  2014-2023  on  average 
to  a  budgetary  deficit  of  2.4%. 
amounted 
Regardless  of  the  recurrent  general  government 
budgetary deficits, the sustained and high positive 
difference  between  net  domestic  savings  and  net 
investment,  resulted  in  structural  net  lending  by 
Austria  to  foreign  economies  that  averaged  1.7% 
of GDP, with a peak of 3.4% in 2020. Thus, most 
of  the  net  savings  in  Austria  have  been  invested 
domestically  (to  finance  private  investment  or 
borrowing 
government),  while  a 
comparatively  smaller  share  was  used  to  finance 
projects abroad. 

the 

by 

Graph A5.1: Net savings-investment balance 

Source: AMECO. 

As  a  result  of  its  regular  position  of  a  net 
creditor to the rest of the world, the Austrian 
economy has accumulated significant foreign 
assets and has been recording a positive net 
international  investment  position.  As  of  Q3 
2024, total assets on foreigners reached 235% of 
GDP, while liabilities to foreigners stood at almost 
214%  of  GDP,  resulting  in  a  net  international 
investment  position  (NIIP)  equivalent  to  21.4%  of 
GDP  (see  Graph  A5.2).  The  accumulated  net 
foreign direct investment (14.4% of GDP as of Q3 
2024) accounted for most of the NIIP. The stock of 
official foreign reserve assets, which amounted to 
6.7%  of  GDP,  also  contributed  positively  to  the 
NIIP.  The  net  portfolio  investments,  which  are 
directly  affected  by  the  price  volatility  of  equity 
valuations, have been negative, at almost -10% of 
GDP  as  of  Q3  2024.  However,  they  were  more 
than offset by the net stock of other investments, 
which amounted to just below 10% of GDP at the 
same  time.  Thus,  while  the  Austrian  economy 
seems  well  integrated  in  international  capital 
flows as a recipient of foreign capital, it remains a 
net  capital  exporter,  notably  in  terms  of  direct 
investments abroad. 

Graph A5.2: International investment position 

Source: ECB. 

47 

-10-505101520253035402017201820192020202120222023% of GDPPrivate investment, netLending to the governmentPrivate savings, netPrivate saving, grossBorrowing from the rest of the world-300-200-100010020030020172018201920202021202220232024-Q3% of GDPForeign Direct Investment, AssetsPortfolio Investment, AssetsOther investment, AssetsOfficial reserve assetsForeign Direct Investment, LiabilitiesPortfolio Investment, LiabilitiesOther investment, LiabilitiesNIIP 
 
   
  
 
 
Structure of the capital markets and 
size of the financial sector 

The Austrian economy stands out with one of 
the  comparatively  smaller  domestic  capital 
markets in Europe.  The market capitalisation of 
listed  equity  reached  30%  of  GDP  at  the  end  of 
2023 (see Graph A5.3), which is well below the EU 
average  of  67%  of  GDP.  At  the  same  time,  non-
financial  corporations  accounted  for  more  than 
70% of that capitalisation, which implies that the 
stock market in Austria is to a large extent geared 
towards funding the non-financial segment of the 
real  economy.  The  outstanding  volume  of  debt 
securities  reached  122%  of  GDP  at  end-2023, 
which  is  slightly  below  the  EU  average.  Bonds 
issued by the government and monetary financial 
institutions  (MFIs)  accounted  for  almost  56%  and 
35% of the total, respectively.  

Graph A5.3: Capital markets and financial 
intermediaries 

Source: ECB, EIOPA, AMECO. 

While the financial sector in Austria remains 
dominated  by  banks,  non-bank  financial 
intermediaries  also  play  an  important  role. 
Starting  from  253%  of  GDP  in  2020,  the  size  of 
the banking sector gradually  declined to 214% of 
GDP in 2023, which remains somewhat below the 
EU  average  of  257%.  Austria  has  several  large 
credit  institutions,  and  the  two  largest  banking 
groups  (Erste  Group  Bank  and  Raiffeisen  Bank 
International)  have  extensive  activities  in  central, 
eastern  and  south-eastern  Europe.  In  particular, 
the  exposure  of  the  Austrian  banking  sector  to 
a 
Russia 
bank-capital 
(manageable 
in  one  credit 
perspective  and  concentrated 

from 

48 

institution)  warrants  close  oversight.  In  2024, 
Austrian  banking  subsidiaries  in  Russia  amounted 
to  less  than  10%  of  their  total  assets  in  central, 
eastern  and  south-eastern  Europe.  Banking 
concentration appears to be lower than on average 
in the EU, with the top five MFIs representing less 
than  40%  the  sector.  The  insurance  and  pension 
funds sectors, with total assets of almost 28% of 
GDP  and  6%  of  GDP  at  end-2023,  play  a  lesser 
role  in  the  non-bank  intermediation.  By  contrast, 
investment  funds,  though 
their  total  assets 
dropped  by  12  percentage  points  to  almost  46% 
remain 
of  GDP  between  2021  and  2023, 
significant (see section on institutional investors). 

Resilience of the banking sector 

is  well-
The  Austrian  banking  sector 
capitalised  and  exhibits  good  resilience  to 
risks.  The  system-wide  capital  ratio  stood  at 
20.6%  in  Q3  2024,  broadly  in  line  with  the  EU 
average. In the same period, the Austrian banking 
sector reported a consolidated common equity tier 
1  (CET1)  ratio  of  17.5%,  more  than  double 
compared  with  levels  recorded  before  the  global 
financial  crisis  of  2008-2009,  in  line  with  tighter 
prudential  requirements.  While  the  capitalisation 
of  Austrian  banks  has  improved  in  recent  years, 
the  largest  banks  still  have  lower  capital  buffers 
than  their  euro  area  peers.  Banking  groups  in 
Austria  have  issued  securities  eligible  for  the 
Minimum  Requirement  for  own  funds  and  Eligible 
Liabilities (MREL). Notably, in December 2023 with 
these issuances, the average MREL level (as % of 
TREA) of banks in Austria stood at 38.3%, up from 
last 37%. Against an average MREL binding target 
(including  CBR)  as  of  1  January  2024  of  29.7% 
TREA  (including  CBR),  all  banks  in  Austria  meet 
their  final  MREL  targets  (132).  In  December  2023, 
Austria published information on its national  bail-
in mechanic in line with EBA guidelines (133). 

Despite  some  deterioration,  banks’  balance 
sheets  show  robust  asset  quality.  With  an 

(132) For additional information, see the European Banking 

Authority’s MREL Dashboard - Q4 2023. 

(133) See the Financial Market Authority’s Information about the 
implementation of an external bail-in and the European 
Banking Authority’s Guidelines to resolution authorities on 
the publication of their approach to implementing the bail-in 
tool. 

Non-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250  Listed equity                 Bonds                      Assets by sector% of GDP 
  
 
loans 

aggregate  non-performing  loan  (NPL)  ratio  of 
2.3%  in  Q3  2024,  which  is  slightly  above  the  EU 
average  of  1.9%,  credit  quality  remains  robust. 
Although the share of loans with variable interest 
rates  has  decreased  steadily  in  recent  years, 
to 
roughly  50%  of  new  mortgage 
households  are  still  granted  with  variable  interest 
rates. In line with the increase in bankruptcies over 
the  past  three  years,  the  corporate  NPL  ratio 
increased to 3.9% in Q3 2024. The share of loans 
that  have  deteriorated  significantly 
in  credit 
quality (Stage 2) under the International  Financial 
Reporting Standard (IFRS) 9 has remained broadly 
stable, but well above the EU average. At the same 
time, banks’  aggregate  coverage  ratio  of  NPLs  by 
existing  provisions  has  declined  to  45.9%  but 
remains  close  to  the  EU  average.  The  coverage 
ratio  decreased  on  the  back  of  new  NPLs,  for 
which  provisions  are  still  low,  and  the  write-down 
of highly provisioned legacy NPLs. 

long-term  debt 

Austrian banks maintain very strong liquidity 
positions,  with 
issuance 
returning  to  pre-crisis 
levels.  Banks  are 
exposed  to  a  very  low  liquidity  funding  risk  and 
show an excellent term adequacy between assets 
and liabilities. All credit institutions in Austria have 
liquidity coverage ratios well above the regulatory 
minima.  Banks  have  benefitted  from  the  increase 
in  term  deposits,  and  from  the  issuance  of  debt 
securities,  while  the  monetary  tightening  by  the 
ECB led to falling cash balances at central banks. 

Resilience of the non-bank financial 
intermediaries 

The 

The  Austrian  insurance  sector  has  remained 
resilient  and  profitable. 
operating 
environment  of  insurance  companies  has  been 
shaped  by  elevated  inflation,  as  well  as  higher 
interest  rates  and  financial  assets  prices.  These 
factors contributed to low economic growth and a 
reduction in real household income in 2023, which 
dampened  insurance  demand.  Nevertheless,  the 
insurance  companies 
profitability  of  Austrian 
recovered  compared  to  the  previous  year,  across 
all  insurance  segments.  Index  clauses  widely 
embedded  in  insurance  contracts  led  to  higher 
income  and  mitigated  claim  cost 
premium 
inflation.  Moreover,  financial  market  performance 
in  2023  y-o-y,  which  additionally 
improved 
total 
supported  profitability.  Almost  half  of 

premiums  were  generated  abroad,  with  Czechia, 
Poland, Slovakia, Romania and Hungary among the 
key  markets.  Compared  to  EU  peers,  Austrian 
insurance  companies  maintain  a  relatively  high 
level  of  capitalisation,  with  average  solvency 
capital  requirement  (SCR) of  almost  312%,  above 
the  EU  average,  resulting  from  particularly  high 
ratios in the non-life segment. However, downside 
risks  remain,  given  the  high  uncertainty  in  the 
macro-financial  environment.  On  a  positive  note, 
Austria  is  among  the  EU  Member  States  with 
relatively  limited  insurance  protection  gaps  for 
natural hazards (134). 

Sources of business funding and the 
role of banks 

Overall, firms in Austria rely more on funding 
by banks and less on the capital markets, as 
compared  with  their  European  peers.  More 
specifically,  at  the  end  of  2023,  bank  finance 
through  loans  constituted  37.8%  of  all  funding 
sources  for  Austrian  non-financial  corporations 
(NFCs),  while  listed  shares  and  bonds  accounted 
for only 14.6% of funding sources. This compares 
with  27.2%  and  23.8%  on  average  in  the  EU. 
Expressed  as  a  percentage  of  GDP,  the  overall 
level  of  NFC  funding  was  169.3%  in  Austria  and, 
on average, 230.3% in the EU (see Graph A5.4). 

Austrian  companies  rely  mostly  on  internal 
financing,  as  do  their  European  peers. 
According  to  the  2024  EIB  Investment  Survey, 
68%  of  investments  needs  of  Austrian  firms  are 
covered  by  internal  funding,  just  above  the  EU 
average  of  66%.  At  the  same  time,  only  12%  of 
Austrian  firms  believed  that  their  investment 
activities over the last three years were less than 
needed,  better  than  the  EU  average  for  perceived 
underinvestment  (14%),  suggesting  that  there  is 
only  a  small  financing  gap  relative  to  investment 
demand.  However,  this  may  not  be  the  case  for 
firms  with  no  or  limited  capacity  for  internal 
funding,  such  as  small  and  medium-sized 
enterprises (SMEs) or innovative start-ups. 

The banking sector plays an important role in 
financing  the  economy.  The  banking  sector  in 

(134) See EIOPA’s Dashboard on the insurance-protection gap for 

natural catastrophes. 

49 

 
 
Austria is predominantly domestic-owned and with 
a  relatively  low  concentration,  with  several  large 
banking  groups  having  international  presence  in 
central,  eastern  and  south-eastern  Europe.  The 
sector  remains  resilient,  with  good  liquidity  and 
capital positions, as well as solid profitability, close 
to EU average levels (see Table A5.1). As a result, 
NFCs  overall  will  not  face  serious  challenges  in 
accessing  bank  loans  in  the  near  term.  However, 
the  number  of  defaults  of  real  estate  companies 
has 
non-performing 
commercial  real  estate  (CRE)  loans  on  banks’ 
balance  sheets.  CRE  loans’  coverage  ratios  have 
decreased, while the market values of real estate 
collateral have also been under pressure. 

increased, 

have 

as 

Graph A5.4: Composition of NFC funding as a % of 
GDP 

The sum of NFC liabilities only reflects the total for the NFC 
liabilities considered. Reference period 2023. 
Source: Eurostat. 

Despite the gradual decline in interest rates, 
corporate  lending  growth  has  been  slowing 
down.  For  households,  the  annual  credit  growth 
rate for adjusted loans has started to bottom out, 
from  -1.9%  at  the  end  of  2023  to  -1.2%  in  the 
third  quarter  of  2024.  In  particular,  the  housing 
loan component has seen a moderate recovery in 
demand  since  the  first  quarter  of  2024,  starting 
from  a  historic  low  after  sharp  declines  in  the 
previous 18 months The moderate rebound is due 
to  improvements  in  affordability,  driven  by  rising 
real  incomes  and  slightly  falling  financing  costs. 
For  NFCs,  annual  credit  growth  reached  1.0%  in 
the  third  quarter  of  2024,  down  from  2.7%  in 
2023.  Demand  for  corporate  loans  has  been 
falling  since  2022,  with  a  persistent  weakness 
particularly  in  the  demand  for  long-term  loans  to 
finance  investments.  Both  the  weak  demand  and 
the  more  restrictive  credit  supply  reflect  the 
challenging  economic  environment,  as 
the 
economic  slowdown  and  rising  costs  have  been 
putting  companies  under  pressure.  Estimated 
insolvency  liabilities  have  increased  substantially 
in  the  course  of  2024,  in  particular  affecting  the 
retail,  real  estate,  construction  and  hospitality 

50 

sectors.  Moreover,  the  Bank  Lending  Survey  (135) 
showed  that  the  downward  trend  in  demand  for 
corporate  loans  continued  in  Q3 2024,  albeit  at  a 
very  moderate  pace.  The 
in 
corporate  lending  has  risen  steadily  since  2022, 
especially for loan applications from SMEs. 

rejection 

rate 

Retail investors in capital markets 

capital 

markets 

Austria’s 
remain 
comparatively  small.  The  main  stock  exchange 
in Austria is the Vienna Stock Exchange. The equity 
market is relatively small in terms of capitalisation 
(equivalent  to  30%  of  GDP  vs  an  EU  average  of 
around 68% as of end-2023) and volumes traded. 
The low market capitalisation could be due to the 
characteristics of the Austrian corporate sector, in 
particular  the  small  number  of  large  globally 
operating  multinational  companies  (with  annual 
revenues  above  EUR 1 billion).  The  domestic  bond 
market  is  dominated  by  Austrian  government 
bonds,  while  bonds  issued  by  NFCs  represent  a 
smaller  share.  The  use  of  equity  by  SMEs  is 
relatively moderate, as 8.2% of SMEs indicated in 
the 2023 SAFE survey that equity was relevant for 
them,  compared  to  an  EU  average  of  10.1% (136). 
Initial public offerings (IPOs) remain rather limited 
and  small,  given  the  size  of  the  economy.  While 
there  are  relatively  fewer  large  companies  in 
Austria compared to the EU average, the corporate 
sector  tends  to  be  rather  capital  intensive  and 
would benefit from a deeper and well-functioning 
CMU. 

Austria has increasingly supported efforts to 
develop the CMU in the EU. At a meeting in May 
2024, the finance ministers of Austria, Croatia and 
Slovenia  issued  a  joint  statement  calling  for 
further  progress  on  CMU (137).  The  statement 
identified  a  number  of  common  CMU  priorities, 
including:  (i)  the  need  to  consider  the  priorities  of 
all  Member  States; 
(ii)  debating  centralised 
supervision  at  a  later  stage;  (iii)  a  pragmatic 

(135) See OeNB Report 2024/18: Bank Lending Survey – Recession 

curbs loan demand. 

(136) See Data and surveys - SAFE - European Commission, 2023, 

Results by country. 

(137) Common Statement by the Finance Ministers from Slovenia, 
Croatia and Austria - Unlocking the EU's productivity: a 
finance ministers' perspective from finance ministers, 
28 May 2024. 

050100150200250ATEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equity 
  
 
approach  to  the  securitisation  framework;  (iv) 
harmonising the requirements for companies to be 
listed  on  exchanges; 
(v)  eliminating  national 
barriers  for  institutional  investors;  (vi)  making  tax 
systems more supportive of investments in capital 
markets; and (vii)  expanding financial  literacy and 
market participation among the EU population. 

ownership 
in 

represents 
terms  of  volume 

Austrian  households’  savings  are  invested 
conservatively, as financial instruments form 
only  a  small  part  of  their  wealth.  Main 
the  most 
residence 
for 
important  asset 
homeowners.  On  average,  Austrian  households 
have financial portfolio profiles with very low risk. 
Few  households  hold  assets  that  are  typically 
classified  as  higher-yield.  According  to  the  latest 
Eurosystem  Household  Finance  and  Consumption 
Survey (138),  only  12.3%  of  households  in  Austria 
hold mutual funds, only 6.1% hold stocks and only 
2.5% hold bonds. Among the households that held 
higher-yield  assets,  these  assets  accounted  for 
about  40%  of  the  financial  portfolio,  with  this 
share 
the  net  wealth 
distribution. 

rather  stable  across 

The  degree  of  direct  retail  investment  in 
Austria’s  capital  markets  is  low.  Since  2015, 
the  share  of  cash  and  deposits  in  households’ 
assets  has  been  on  an  upward  path  and  reached 
40% in 2023, well above the EU average of 32.3% 
(see  Graph  A5.5).  The  assets  in  investment  funds 
continue  to  grow  and  represent  around  11%  of 
households’  financial  assets.  The  share  of  assets 
held in pension and investment funds or directly in 
financial  investment instruments in  total  financial 
assets has declined from 40.2% in 2015 to 35.8% 
in 2023 and still falls substantially short of the EU 
average of 45.4%. 

The  comparatively  strong  saving  rate  of 
Austrian  households  in  recent  years  and  the 
high  share  of  cash  and  deposits 
in 
households’  assets  suggest  there  is  some 
room  to  increase  the  level  of  direct  or 
indirect  retail  investments.  Encouraging  the 
funded  supplementary 
build-up  of  universal 
pension schemes would positively contribute to (i) 
the  sustainability  and  adequacy  of  pension 
benefits;  (ii)  investment  in  equity;  (iii)  access  to 
finance;  (iv)  growth;  and  (v)  innovation.  Moreover, 

an in-depth assessment of the incentives in place 
to promote retail participation in financial markets 
may also be considered, as well as possible steps 
to  increase  the  availability  of  low-cost,  well-
diversified  investment  products  suited  to  retail 
investors. 

Graph A5.5: Composition of HH financial assets per 
capita and as a % of GDP 

The sum of HH assets only reflects the total for the HH assets 
considered. Reference period 2023. 
Source: Eurostat. 

The role of domestic institutional 
investors 

The  growing  fund  management  industry  in 
Austria  tends  to  invest  less  in  bonds  and 
equity  than  its  European  peers.  Austrian 
investment-fund  industry  assets  grew  by  around 
7%  in  2023  and  continued  to  grow  at  the  same 
rate in the first nine months of 2024. In Q3 2024, 
out of the assets invested in domestic and foreign 
investment  funds  offered  in  Austria,  38.3%  were 
allocated  to  debt  securities,  31.8%  to  investment 
fund  units  and  22.8%  to  shares  and  other 
equity (139).  In  2024,  Austrian  asset  managers 
allocated about 61% of assets to equity and bond 
holdings,  a  somewhat  lower  share  than  the  euro 
area average. 

investment  portfolio  of  Austrian 
The 
domestic institutional investors is focused on 
debt  securities  and  investment  fund  shares. 
is 
The 

in  Austria,  which 

insurance  sector 

(138) OeNB Report 2023/2: Eurosystem Household Finance and 

(139) See Assets and liabilities of investment funds | ECB Data 

Consumption Survey 2021: first results for Austria 

Portal. 

51 

050100150200250020406080100ATEUATEUper capita (000 EUR) (lhs)% of GDP GDP (rhs)Currency and depositsInsurance and pension fundsInvestment fundsBondsListed sharesUnlisted sharesOther equityHH Debt (liability) 
 
  
 
comparatively  small  by  EU  standards  (in  Austria 
assets were equivalent to 27.1% of GDP compared 
with  an  EU  average  of  53.4%),  mainly  invests  in 
debt securities, at 30.1% of total assets as of Q3-
2024 (compared to 34.6% for the euro area as a 
whole) (140),  with  another  27.6%  held 
in 
investment  fund  shares  and  21.5%  in  equity.  The 
combined  share  of  assets  connected  to  domestic 
banks  and  the  Austrian  government  has  steadily 
decreased  over  the  years  and  has  almost  halved 
since  2016.  The  domestic  pension  fund  industry, 
whose  assets  were  equivalent  to  around  6%  of 
GDP  at  end-2023,  mainly  invests  in  collective 
investment undertakings  (notably  equity  and debt 
funds).  Bank  deposits  are  the  second  largest 
investment asset of pension funds, while corporate 
and government bonds play an even lesser role in 
their asset structure (141). 

The depth of available venture and 
growth capital 

The local venture and growth capital market 
is  not  yet  sufficiently  developed  to  meet  all 
the  financing  needs  of  innovative  firms. 
Currently  the  number  of  start-ups  (e.g.  in  Vienna) 
remains  high,  due  to  the  favourable  social 
environment  and  government  support,  e.g.  from 
Austria  Wirtschaftsservice  and 
the  Austrian 
Research  Promotion  Agency  Despite  an  overall 
favourable situation, Austria’s support for business 
financing can be improved. A key barrier hindering 
firms’  innovation  performance  is  the  shortage  of 
venture  and  growth  capital, 
including  angel 
funding  and  formal  venture  capital.  The  average 
value of annual private equity investment relative 
to  nominal  GDP  went  up  to  0.2%  in  the  period 
2021-2023  from  0.15%  in  2015-2020,  but  it  is 
still  well below the equivalent EU  average (0.6%). 
For  venture  capital,  investments  increased  to 
0.08% of GDP in 2021-2023, in line with Austria’s 
EU peers (142). 

Limited  venture  capital  financing  is  partly 
of 
low 
driven 

participation 

the 

by 

investors, 

institutional 
including  pension 
funds.  A  2024  paper  showed  that  pension  funds 
in  Austria  accounted  on  average  for  only  1%  of 
private  equity  and  venture  capital  funds  raised 
annually  over  2007-2023,  a  figure  that  falls 
substantially below the 19% in the Baltic states or 
the  shares  above  20%  in  Sweden,  Finland  and 
Denmark (143). 

Austria  has  taken  measures  to  address  the 
small  market  for  pre-IPO  financing,  due  to 
the  limited  availability  of  domestic  venture 
capital and private equity funds. In June 2023, 
a  new  state-financed  venture  capital 
fund 
(Gründungsfonds  II:  Startup  Fund)  was  set  up  for 
at least 10 years. The fund provides state funding 
up  to  EUR 72 million  for  investments  in  young, 
innovative,  Austria-based  companies  in  the  start-
up  and  growth  phase  and  is  intended  to  leverage 
private  investments  of  up  to  EUR 500 million. 
However,  this  funding  remains  relatively  small  in 
scale,  compared  to  that  in  other  EU  Member 
States. 

Austria’s  RRP  also  includes  measures  to 
support  the  financing  of  start-ups.  Reform 
measures included the adoption of a new company 
form  for  investments  in  company  holdings  in  the 
form  of  the  SICAV  (société  d’investissement  à 
capital  variable),  a  collective  investment  scheme 
that  is  already  well  established  in  other  EU 
countries.  The  scheme  is  intended  to  make  fund 
shares securitisable and tradable, while also taking 
into account high transparency standards, investor 
protection,  money  laundering  prevention  and  the 
exclusion  of  tax  structuring  models.  As  an 
additional  measure,  the  start-up  package 
in 
Austria’s  RRP  aims  to provide  sustainable  support 
to  growth-oriented  start-ups  and  to  increase  the 
location 
the 
attractiveness 
internationally.  The 
reform  measures  also 
introduce  a  new  legal  form,  tailored  to  the  needs 
of start-ups and innovative SMEs. 

business 

of 

Financing the green transition 

(140) Source: Assets and liabilities of insurances | ECB Data Portal. 

(141) Source: Occupational pensions statistics - EIOPA. 

(142) Commission staff working document: Monitoring progress 
towards a capital markets union: a toolkit of indicators - 
2024 

Supervisory 
contributed 

guidance 
the 
to 

has 
development 

increasingly 
of 

(143) Source: Closing the gaping hole in the capital market for EU 

start-ups – the role of pension funds – CEPS. 

52 

 
 
 
sustainable  finance.  In  recent  years,  the 
Austrian  financial  supervisory  authorities  (e.g.  the 
Austrian  National  Bank  and  the  Financial  Market 
Authority  (FMA))  have  introduced  environmental, 
social,  and  governance  (ESG)  criteria  into  their 
activities.  The  FMA  has  published  a  guide  for 
managing  sustainability  risks,  raising  awareness 
among financial market participants, and providing 
guidance  and  examples  of  best  practice  on  ESG 
risks.  The  FMA  has  also  conducted  climate  stress 
tests  in  the  insurance  and  pension  sectors  and 
found  that,  while  investment  portfolios  are  not 
fully  compliant  with  climate  goals,  they  are 
outperforming international  benchmarks.  The FMA 
has also analysed the position of asset managers 
(i.e. 
funds,  alternative 
investment  fund  managers  and  investment  fund 
management  companies)  to  assess  whether  they 
are taking account of sustainability aspects in their 
investment 
and 
incorporating  sustainability  risks  into  their  asset 
and risk management systems. 

corporate  provision 

management 

activities 

The interest in sustainable financial products 
and  services  on  the  Austrian  market  has 
increased 
in  recent  years.  For  example, 
investment  funds  certified  with  the  Austrian 
Ecolabel for sustainable financial  products (UZ49) 
are  a  fast-growing  market  segment.  Banks  have 
increased the issuance of sustainable bonds in line 
with  Austrian  and  EU  standards.  To  provide  an 
impetus  to  the  development  of  the  green  bonds 
market and the funding of environmental projects, 
in  May  2022,  the  Austrian  government  launched 
its first green bond issuance. In addition to longer-
term  green  bonds,  which  will  fund  a  substantial 
part  of  the  country’s  green  financing  needs, 
Austria  also  included  short-term debt instruments 
like  treasury  bills  and  commercial  papers  in  its 
green  debt  programme.  With  the  issuance  of  a 
green euro medium-term note in December 2023, 
Austria  has  already  issued  all  the  sustainable 
finance  instruments  available  under  the  2022 
green framework. 

Financial literacy 

Financial literacy in Austria is overall slightly 
above  the  EU  average,  but  some  challenges 
remain.  Financial 
in 
literacy 
promoting  retail-investor  participation  in  capital 
markets but also in introducing SMEs and the self-

instrumental 

is 

the 

employed  to  alternatives  to  bank  financing. 
Digitalisation  is  affecting  the  way  retail  financial 
markets  operate,  while 
rapidly  ageing 
population  in  Austria  and  increasingly  precarious 
earnings  amplify  the  need  for  retail-investor 
participation.  Recent  surveys (144)  show  that  28% 
of Austrians have a high level of financial literacy, 
50%  a  medium  level,  and  the  remaining  22%  a 
low level, compared to the EU average of 26% for 
high  literacy,  50%  for  medium,  and  24%  for  low. 
Austria’s results are above the EU average for the 
use  of  digital  financial  services,  trust  in  the 
retirement 
investment  advice 
planning. 

received  and 

Recent  policies  aim  to  improve  financial 
literacy.  The  national  financial  literacy  strategy 
for Austria was launched (145) in autumn 2021 and 
was included in Austria’s RRP. Its four main policy 
priorities  aim  to:  (i)  develop  sound  financial 
decision-making  early  in  life  and  prevent  over-
indebtedness;  (ii)  promote  responsible  financial 
planning  for  long-term  financial  well-being;  (iii) 
raise  awareness  of  the  importance  of  financial 
literacy  and  ensure  access  to  quality  financial 
for  all;  and 
education 
the 
effectiveness  of 
initiatives 
financial 
through  dialogue,  coordination  and  evaluation. 
Over the implementation period 2021-2026, these 
priorities  are 
initiatives 
supporting gender equality, providing people living 
in Austria with the knowledge and skills required to 
profit  from  the  digitalisation  of  retail  financial 
services,  and  helping  consumers 
to  make 
sustainable financial choices. 

complemented  by 

(iv) 
literacy 

increase 

vison 

better 

The  strategy  also  includes  two  competence 
frameworks  that  set  common  goals  and  a 
long-term 
financial 
for 
education  in  Austria,  on  which  stakeholders 
from the financial education sector can base their 
own programmes and measures. In particular, this 
targets basic financial education in schools and for 
young people, as well as adults. The launch of the 
financial  literacy  online  platform  “Finanznavi”  in 
autumn 2024  provided  a comprehensive and free 
of charge information and learning site, to improve 
financial  literacy and  offer guidance  on important 
financial  issues  grouped  around  different  life-
stages.  

(144) Monitoring the level of financial literacy in the EU - July 

2023 - - Eurobarometer survey 

(145) See A national financial literacy strategy for Austria. 

53 

 
 
Table A5.1:  Financial indicators 

(1) Annualised data. 
Credit growth and pension funds EU data refers to the EA average. 
Source: ECB, ESTAT, EIOPA, DG FISMA CMU Dashboard, AMECO. 

54 

20172018201920202021202220232024-Q3EUBanking sectorTotal assets of MFIs (% of GDP)220.7219.1220.4253.4246.2227.0214.1208.4248.4Common Equity Tier 1 ratio15.615.415.616.116.016.517.617.516.6Total capital adequacy ratio18.918.618.719.519.319.420.620.620.1Overall NPL ratio (% of all loans)3.52.62.22.01.81.82.22.31.9NPL (% loans to NFC-Non financial corporations)5.43.63.13.12.92.83.63.93.5NPL (% loans to HH-Households)3.83.32.82.62.32.12.32.32.2NPL-Non performing loans coverage ratio48.853.252.553.453.953.148.745.942.1Return on Equity18.78.67.84.16.49.711.612.310.0Loans to NFCs (% of GDP)39.139.941.244.645.444.843.442.530.0Loans to HHs (% of GDP)42.642.342.745.945.342.639.537.944.5NFC credit annual % growth5.57.16.14.98.49.02.71.00.8HH credit annual % growth3.23.64.33.65.03.5-1.9-1.20.7Non-banks sectorStock market capitalisation (% of GDP)36.929.631.931.939.729.030.329.269.3Initial public offerings (% of GDP)0.000.000.070.000.000.000.00-0.05Market funding ratio35.134.032.834.432.329.529.0-49.6Private equity (% of GDP)0.120.280.080.070.220.140.35-0.41Venture capital (% of GDP)0.030.020.020.020.170.040.02-0.05Financial literacy (composite)------47.5-45.5Bonds (as % of HH financial assets)4.94.54.13.52.92.73.5-2.7Listed shares (as % of HH financial assets)3.93.43.94.15.04.75.2-4.8Investment funds (as % of HH financial assets)9.38.79.69.610.810.511.2-10.0Insurance/pension funds (as % of HH financial assets)20.219.920.519.518.116.016.0-27.8Total assets of all insurers (% of GDP)37.534.835.037.135.828.527.927.654.8Pension funds assets (% of GDP)--6.26.76.75.65.65.823.401-Mar04-OctNov-1718-2425-27Colours indicate performance ranking among 27 EU Member States. 
 
  
 
ANNEX 6: EFFECTIVE INSTITUTIONAL FRAMEWORK 

the 

burden 

remain 

Austria’s  institutional  framework  influences 
its  competitiveness.  Austria  has  a  relatively 
good  regulatory  governance  framework,  and  is 
making efforts to simplify legislation and improve 
policy  coherence.  However,  gaps 
in 
and 
administrative 
reducing 
stakeholder  engagement  for  draft  regulations. 
Austria  has  made  progress  on  digitalisation,  with 
improved  public  services  online  and  a  focus  on 
digital  transformation  and  smart  government. 
introduced 
Additionally, 
the  government  has 
reforms 
increase  the 
attractiveness  of  the  public  sector  and  has 
strengthened  the  legislative  framework  related  to 
corruption. The justice system continues to operate 
efficiently. 

in  the  civil  service  to 

Public perceptions 

Graph A6.1: Trust in justice, regional / local 
authorities and in government 

(1) EU-27 from 2019; EU-28 before 
Source: Standard Eurobarometer surveys 

public 

in  Austria’s 

Trust 
institutions 
continues to be above the EU average. Trust in 
justice institutions and in subnational governments 
follow  very  similar  trends  and  remain  high,  while 
trust in  central  government  is  lower (Graph  A6.1). 
Aspects  that  could  help  increase  trust  are  less 
bureaucracy  and  more  transparency  in  decision-
making and use of public funds (146). The perceived 

level  of  quality  of  government  has  remained 
mostly stable (147). 

Quality of legislation and regulatory 
simplification  

Austria’s  overall  performance  in  developing 
and  evaluating  legislation  is  slightly  above 
the EU average. Performance is stronger for ex-
ante  impact  assessments  and  ex  post  evaluation 
of  legislation  than  for  stakeholder  engagement, 
which  remains  underdeveloped.  There  is  room  for 
strengthening  the  transparency,  oversight  and 
quality  of  public  consultations  of  primary  and 
secondary 
legislation.  Public  consultations  of 
secondary  regulations  would  also  benefit  from 
stronger 
their 
methodology  and  systematic  adoption.  Recent 
policy  measures  have  aimed 
increase 
participatory  policymaking  processes,  with  the 
publication  of  a  practical  guide  for  policymakers 
on organising participatory processes in the digital 
age.  Austria  is  also  working  to  improve  policy 
coherence  and  improve  performance  budgeting 
(148). 

requirements 

regarding 

to 

Graph A6.2: Indicators of Regulatory Policy and 
Governance (iREG) 

Source: OECD (2025), Regulatory Policy Outlook 2025 and 
Better Regulation across the European Union 2025 
(forthcoming). 

(146) Understanding Europeans’ views on reform needs - April 
2023 - - Eurobarometer survey, Country Fact Sheet. 

(147) Inforegio - European Quality of Government Index 

(148) Bundeskanzleramt (n.d.), ‘Umsetzung der Agenda 2030’ 

55 

00.10.20.30.40.50.60.70.80.9AutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSummerWinterSummerWinterSpringAutumnSpringAutumn2014201520162017201820192020202220232024Justice,  legal system EU27Justice,  legal system ATRegional or local public authorities EU27Regional or local public authorities ATGovernment  EU27Government  AT0.00.51.01.52.02.53.03.54.0Primary lawsSubordinateregulationsPrimary lawsSubordinateregulationsPrimary lawsSubordinateregulationsAT_StakeholderengagementAT_Regulatory ImpactAssessmentAT_Ex-post evaluation oflegislationMethodologySystematic adoptionTransparencyOversight and quality control2021EU-27 
 
      
 
   
 
 
 
Table A6.1:  Austria.  Selected indicators on administrative burden reduction and simplification 

(1)  This table presents a subset of iREG indicators focusing on regulatory costs. The indicators refer to primary legislation. 
Source:  OECD (2025), Regulatory Policy Outlook 2025 [https://doi.org/10.1787/56b60e39-en] and Better Regulation across the 
European Union 2025 (forthcoming). 
Source:  

There  are  some  gaps  in  measures  to  reduce 
administrative  burden.  For  example,  ex  post 
evaluations of primary legislation are not required 
to  consider  the  consistency  of  regulations  and 
address  areas  of  duplication.  Moreover, 
the 
government  has  not  conducted  recently  in-depth 
reviews  of  specific  regulatory  areas  and  public 
stocktakes of legislation (see table A6.1).  

Social dialogue 

is 

Social  partners  generally  play  a  crucial  role 
in  Austria  in  shaping  economic  and  social 
policies.  Social  dialogue 
institutionally 
recognised  and  part  of  policymaking  in  Austria 
through  tripartite  dialogue  with  and  bipartite 
negotiation  between  employers  and  employees 
is  generally  focused  on  consensus  and 
and 
compromise.  Social  partners  in  Austria  include 
public  corporations  with  compulsory  membership, 
such  as  the  Chamber  of  Commerce  and  the 
Chamber  of  Labour,  as  well  as  independent 
associations  with  voluntary  membership.  Social 
partners  also  play  a  key  role  in  negotiating 

collective  agreements  that  define  the  rights  and 
obligations of employers and employees (149). 

Efficiency of selected administrative 
procedures 

Selected  administrative  procedures  have 
improved,  but  some  challenges  remain.  A 
report  monitoring  the 
implementation  of  the 
Commission  Recommendation  and  Guidance  on 
for 
speeding  up  permit-granting  procedures 
renewable  energy  and 
infrastructure 
projects (150) shows that there is clearly scope for 
the 
further  aligning  national  practices  with 

related 

(149) For  an  analysis  of  the  involvement  of  Austria’s  social 
partners at national level in the European Semester and the 
Recovery  and  Resilience  Facility,  see  Eurofound  (2025), 
National-level  social  governance  of  the  European  Semester 
and the Recovery and Resilience Facility. 

(150) European Commission: Directorate-General for 

Energy, Monitoring the implementation of the Commission 
recommendation and guidance on speeding up permit-
granting procedures for renewable energy and related 
infrastructure projects – Final report, Publications Office of 
the European Union, 2025, link 

56 

Ex ante impact assessment of legislationEx post evaluation of legislationIdentify and assess the impacts of the baseline or ‘do nothing’ option.Is required to consider the consistency of regulations and address areas of duplication.Identify and assess the impacts of alternative non-regulatory options.Is required to contain an assessment of administrative burdens.Quantify administrative burdens of new regulations.Is required to contain an assessment of substantive compliance costs.Quantify substantial costs of compliance of new regulations.Compares the impact of the existing regulation to alternative options.Assess macroeconomic costs of new regulations. Periodic ex post evaluation of existing regulations is mandatory.Assess the level of compliance.Government uses stock-flow linkage rules when introducing new regulations (e.g., one-in one-out).Identify and assess potential enforcement mechanisms.A standing body has published an in-depth review of specific regulatory areas in the last 3 years.In the last 5 years, public stocktakes have invited businesses and citizens to assess the effectiveness, efficiency, and burdens of legislation.When developing new legislation, regulators are required to …Yes /  For all primary laws For major primary laws For some primary lawsNo / Never 
 
 
   
 
 
Table A6.2:  Key Digital Decade targets monitored through the Digital Economy and Society Index 

Source: State of the Digital Decade report 2024 

guidance  for  faster  and  shorter  procedures  for 
licensing  renewable  energy  projects.  A  reform  of 
the Environmental Impact Assessment (EIA) Act in 
2023  aims  to  facilitate  regulatory  approval  of 
green  projects.  The  reform  aims  to  simplify  and 
streamline  the  EIA  process,  improve  its  structure, 
and  adjust  the  Federal  Administrative  Court 
procedures.  While  the  OECD  product  market 
regulation  indicator  shows  that  that  Austria’s 
licensing  system  is  less  burdensome  than  the  EU 
average,  there  is  still  some  room  for  further 
alignment  with  best  practices.  For  example,  the 
government  does  not  keep  an  up-to-date  online 
inventory  of  all 
licences 
required/issued to businesses by public bodies (see 
also Annex 4). 

the  permits  and 

Digital public services 

of 

public 

digital 

Austria  has  made  steady  progress  in  the 
provision 
services, 
contributing  positively  to  the  EU’s  Digital  Decade 
targets (Table A6.2). The country performs around 
the  EU  average  in  digital  public  services  for 
citizens,  with  a  score  of  80.7  out  of  100  (EU 
average:  79.4).  However,  in  digital  public  services 
for  businesses,  Austria  has  untapped  potential, 
scoring  82.9,  slightly  below  the  EU  average  of 
85.4. Austria stands out for the mobile friendliness 
of  its  digital  public  services,  ranking  among  the 
best  in  the  EU  with  a  score  of  99.7  (EU  average: 
95.3).  

stable  since  2022.  Nationwide  access  to  e-health 
services is ensured, with 80% to 100%(151) of the 
population technically able to access online health 
records  using  an  e-ID  compliant  with  the  eIDAS 
Regulation.  Given  its  current  strong  performance, 
Austria  is  well-positioned  to  aim  for  full  e-health 
maturity by 2030. 

The  uptake  of  e-Government  services  in 
Austria is relatively high. 79% of internet users 
interact  with 
online, 
exceeding  the  EU  average  of  75%.  However, 
further  development  of  digital  public  services 
could  encourage  even  greater  adoption  by 
businesses and citizens. 

public  administration 

Austria has already met the Digital Decade’s 
2030  target  for  e-ID  adoption,  as  all  citizens 
have  access  to  a  secure  digital  identity  notified 
under  eIDAS(152).  However,  the  uptake  of  e-ID 
remains limited. Austria is preparing for the rollout 
of  the  European  Digital  Identity  Wallet  (EUDI 
Wallet),  which  could  help  increase  adoption  and 
facilitate  secure  identity  transactions  across  the 
EU.  A  comprehensive  programme  to  enhance 
digital skills across the population, the Digital Skills 
Initiative (DKO), is expected to further increase the 
uptake of digital services. 

Austria  is  now  closer  to  being  ready  for 
seamless,  automated  exchange  of  authentic 
documents  and  data  across  the  EU.  It  has 
completed  its  first  transactions  using  the  Once-
Only  Technical  System,  part  of  the  EU  Single 

Austria  has  a  well-developed  e-health 
system.  The  country  scored  88  out  of  100  in  e-
health system maturity in 2023, well above the EU 
average  of  79,  though  its  score  has  remained 

(151) European Commission. Digital Decade 2024: Country reports 

(152) European Commission, eIDAS Dashboard. 

57 

Digital Decadetarget by 20302022202320242024EU-27Digitalisation of public services176788179100Score (0 to 100)20212022202320232030281838385100Score (0 to 100)202120222023202320303na888879100Score (0 to 100)20212022202320232030AustriaEU-27Digital public services for citizensDigital public services for businessesAccess to e-health records 
 
 
  
 
Digital  Gateway,  and  is  ready  to  roll  out  services 
for citizens and business (153). 

Austria  also  stepped-up  efforts  relating  to 
artificial intelligence (AI). It set up an AI Service 
Centre  and  an  Advisory  Board  for  Artificial 
Intelligence  to  guide  policymakers  on  AI-related 
technical,  social  and  ethical  issues.  In  2024,  the 
government  also  released  the  Practical  Guide  2.0 
for  ‘Digital  Administration:  AI,  Ethics,  and  Law’, 
addressing technological trends such as generative 
AI and Quantum AI, regulatory frameworks like the 
European  AI  Act,  and  serving  as  a  dynamic 
resource for technological advancements. 

Civil service 

for 

senior 

training 

In  2024,  a  key  reform  was  the  Civil  Service 
introduced  mandatory 
Amendment,  which 
management 
civil 
servants.  The  Amendment  also 
introduced 
changes  inspired  by  GRECO  (Group  of  States 
Against  Corruption  of  the  Council  of  Europe) 
recommendations, such as changes on post-public 
employment in the private sector and the adoption 
of  an  OECD-aligned  definition  of  conflicts  of 
interest (154). 

The  Austrian  School  of  Government  (ASG)  is 
now  officially  operational(155),  tasked  with 
ensuring  that  training  curricula  better  match  civil 
service  skills  requirements..  The  School  also 
developed  an  executive  management  programme 
leaders.  The 
for  experienced  public  sector 
programme  will  be  a  key  role  in  mandatory 
training for senior civil servants. 

45%  of  civil  servants  will  retire  in  the  next 
13  years(156),  even  though  the  share  of  public 
sector  staff  over  55  years  is  below  the  EU-27 
is 
average. 
retirement  options,  offering 
decreasing  early 

the  government 

response, 

In 

incentives for late retirement and taking measures 
to increase the attractiveness of the public sector 
as an employer. 

A  staff  survey  in  all  federal  government 
level  of 
departments  revealed  a  high 
satisfaction  among  civil  servants  with  their 
tasks  and  the  work  environment.  However, 
challenges were identified in relation to workflow, 
error  management,  knowledge-sharing,  career 
development and training opportunities. 

Integrity 

consider 

companies 

The  proportion  of  businesses 
in  Austria 
perceiving  corruption  as  a  problem  is  below 
the  EU  average,  despite  concerns  about 
political  influence  in  high-level  cases.  In 
Austria,  55%  of 
that 
corruption  is  widespread  (EU  average  64%)  and 
only  24%  consider  that  corruption  is  a  problem 
when  doing  business  (EU  average  36%)  (157). 
Moreover,  47%  of  companies  believe  that  people 
and businesses caught for bribing a senior official 
are appropriately punished (EU average 31%) (158). 
In  September  2023,  with  the  Corruption  Criminal 
Law  Amendment  Act  2023  Austria  introduced, 
among others, the new criminal offence ‘purchase 
(159).  Penalties  for 
of  a  political  mandates’ 
corruption  offences  were  also  raised  and  a 
conviction  for  corruption  offences  can  now  result 
in  the  loss  of  eligibility  for  office  under  fewer 
(160). 
conditions 
Investigations  of  high-level  corruption  cases,  also 
to  previous  governments,  are 
those 
proceeding.  The  findings  of  an 
independent 
committee,  set  up  by  the  Ministry  of  Justice  to 
investigate  allegations  of  political  influence  in 
criminal  cases,  further  underlined  the  need  to 
strengthen  the  independence  of  the  prosecution 
service  through  a  reform,  including  to  ensure  the 

for  other  offences 

related 

than 

(153) European Commission, Once-Only Technical System 

Acceleratormeter. 

(154) Parlament Österreich, ‘Dienstrechts-Novelle 2024’, link. 

(155) Austrian School of Government, (2024), ‘Executive 

Management-Programm für die Öffentliche Verwaltung 
2024/25’,link 

(156) Eurostat. Data to be updated and reference added in end 

April. 

(157) Flash Eurobarometer 543 on businesses’ attitudes towards 

corruption in the EU (2024). 

(158) Ibid. 

(159) This  offence  covers  offering,  promising  or  providing  (active 
side)  as  well  as  demanding,  accepting,  or  accepting  the 
promise  of  (passive  side)  a  fee  for  exerting  influence  over 
the allocation of a political mandate. 

(160) See the 2024 country-specific chapter for Austria of the Rule 

of Law Report, p. 13. 

58 

 
 
 
independent  operation  of  the  specialised  anti-
corruption prosecutions (161).  

and  staff.  As  regards  judicial  independence,  no 
systemic deficiencies have been reported (166). 

Public procurement is seen as an area at high 
risk  of  corruption  in  Austria  (162).  20%  of 
companies (EU average 27%) think that corruption 
has prevented them from winning a public tender 
or a public procurement contract in practice in the 
last  three  years  (163).  In  2023,  the  Austrian  Court 
of Audit undertook an audit on public procurement 
and  recommended  the  federal  level  to  procure 
more  via  a  central  purchasing  body  .  Close 
relations  between  media  and  politics  also  appear 
to be sectors at high-risk of corruption (164). 

Austria  has  a  public  register  for  lobbyists, 
just  like  most  Member  States,  but  it  has 
limited  coverage.  The 
lobbying  framework 
adopted  in  2013  is  limited  in  scope  and  lacks 
appropriate  sanctions  and  control  mechanisms 
(165). The strengthening of the lobbying framework 
would  help  increase  transparency  and  ensure  a 
level-playing field between companies. 

Justice 

The  justice  system  continues  to  operate 
efficiently  overall.  The  disposition  time  in  civil 
and  commercial  cases  is  very  short  (141  days  in 
2023). The disposition time in administrative cases 
has  increased  (313  days  in  2023,  up  from  285 
days  in  2022)  and  while  the  clearance  rate  was 
100%  in  2023,  it  is  lower  than  in  previous  years 
(112% in 2020). The quality of the justice system 
remains 
its 
digitalisation, such as the possibility to use secure 
remote  working  systems  for  judges,  prosecutors 

includes 

overall. 

high 

This 

(161) See the 2024 country-specific chapter for Austria of the Rule 

of Law Report, pp. 5-7. 

(162) Ibid., pp. 20-21. 

(163) Flash Eurobarometer 543 on businesses’ attitudes towards 

corruption in the EU (2024). 

(164) See the 2024 country-specific chapter for Austria of the Rule 

of Law Report, pp. 20-21. 

(165) Ibid., pp. 17-18. 

(166) For more detailed analysis of the performance of the justice 
system  in  Austria,  see  the  upcoming  2025  EU  Justice 
Scoreboard) and 2024 Rule of Law Report. 

59 

 
 
 
SUSTAINABILITY 
ANNEX 7: CLEAN INDUSTRY AND CLIMATE MITIGATION 

faces 

significant 

innovation  and  exports, 

Austria 
challenges 
regarding  its  clean  industry  transition  and 
climate mitigation. Despite its strong position in 
its  net-zero 
green 
technologies  manufacturing 
lacks  dedicated 
strategies, and permitting is lengthy and complex. 
Austria  relies  heavily  on  imports  of  critical  raw 
materials  in  some  key  sectors.  By  reinforcing  its 
positive  trend  on  circularity,  Austria  could  reduce 
this  dependence  and 
resource 
productivity, also in the context of shifting toward 
battery-electric  vehicles.  Industry  decarbonisation 
policies  need  strengthening  due  to  Austria's  high 
greenhouse  gas  emissions  intensity  and  reliance 
on  energy-intensive  sectors  facing  competitive 
pressures.  Although  being  a 
in 
recycling,  Austria  is  also  in  the  lead  for  waste 
generation.  This  annex  reviews  the  areas  in  need 
of  urgent  attention  in  Austria’s  clean  industry 
transition  and  climate  mitigation, 
looking  at 
different dimensions. 

frontrunner 

improve 

its 

Strategic autonomy and technology 
for the green transition  

Net zero industry 

Despite  challenges,  Austria  remains  a  major 
supplier  of  PV  and  has  potential  for  further 
development  in  wind  technologies  (167).  Its 
manufacturing  capacity  amounts  to  between  400 
and  800  MW/y  (2-4%  of  EU  capacity)  for  solar 
components,  most  specifically inverters,  for  which 
Austria  is  a  competitive  exporter.  However,  the 
in 
share  of  Austrian-manufactured  modules 
residential  PV  systems  fell  from  14%  (2021)  to 
2.4%  (2023)  despite  a  growing  domestic  market. 
To keep its edge, in June and July 2024, a “Made-
in-Europe” bonus was introduced in the form of a 
20%  top-up  for  investment  support  for  new 
photovoltaic  projects.  Regarding  wind,  at  least 
three facilities producing turbine components were 
identified,  with  production  amounting  to  EUR  3 
billion (3% of total EU production). Austria creates 
between 800 and 850 MWh/y worth of production 

in  battery  and  storage  technologies,  a  negligible 
share of total EU capacity. 

Austria’s  clean  tech  manufacturing  capacity 
is  supported  by  only  few  relevant  policy 
frameworks  and  investment  streams.  The 
environmental 
masterplan 
(Masterplan  Umwelttechnologie)  identifies  areas 
where support is needed for environmental policies 
between  2019  and  2030  (168).  Several  of  them 
have an impact on manufacturing, even though an 
explicit objective on this has not been defined.  

technologies 

these 

Additionally,  there  are  plans  to  brand  Austrian 
products for export, to support local manufacturing 
and  increase  the  attractiveness  of  environmental 
professions.  Besides 
cross-technology 
frameworks, net zero technologies are not covered 
by dedicated strategies or legislation, which would 
allow  for  faster  permitting  procedures  or  specific 
sandboxes.  Currently,  permitting  for  projects 
requiring  an  environmental  impact  assessment 
usually  requires  22  to  23  months  when  counted 
from  the  application  (or  10-11  months  following 
the  acknowledgement  of  the  project  developers’ 
information 
Limited 
complete) 
digitalisation  of  the  industrial  permit  granting 
process  may  have  a  negative  impact  on  the 
duration.  Austria’s  federal  structure  can  also  add 
to the complexity. 

(169). 

as 

In  November  2023,  the  European  Commission 
approved  an  EUR  60  million  state  aid  scheme 
under  the  EU’s  Temporary  Crisis  and  Transition 
Framework in Austria. The purpose of the scheme 
is  to  support  investment  in  the  production  of 
batteries, solar panels, wind turbines, heat-pumps, 
electrolysers  and  equipment  for  carbon  capture 
usage  and  storage  –  as  well  as  key  components 
designed  and  primarily  used  as  direct  input  for 
producing  such  equipment  or  related  critical  raw 
materials necessary for their production.  

Austria’s investment in energy R&D is higher 
than  the  average  of  other  members  of  the 
International  Energy  Agency  and  Austria  is 

(168) Federal Ministry of Climate Action, Environment, Energy, 
Mobility, Innovation and Technology, 2019, Masterplan 
Umwelttechnologie, Bmk.gv.at. 

(169) Federal Ministry of Climate Action, Environment, 

(167) European Commission, 2025, The net-zero manufacturing 

industry landscape across the Member States, Op.europa.eu.  

Energy, Mobility, Innovation and Technology, 2024, UVP-
Bericht an den Nationalrat, Bmimi.gv.at. 

60 

 
 
 
 
 
 
 
Austria 

focuses 

strong  in  green  innovation  and  green  jobs. 
Backed  by  its  Energy  Research  and  Innovation 
Strategy, 
on strengthening 
innovation-intensive  companies  and  enhancing  its 
role  as  a  location  for  green  tech  production,  by 
defining national areas of strength and reinforcing 
them at EU level. In addition to these research and 
innovation  efforts,  Austria  supports  the 
local 
manufacturing  of  innovative  energy  technologies 
in  three  regions  selected  for  the  Energy  Flagship 
Region,  one  of  them  focusing  on  the  Austrian 
hydrogen  market.  In  2024,  the  country  ranked 
third  in  the  EU  Eco-Innovation  Index  (170),  and 
between 2013 and 2023, Austria had the highest 
share of public investment in RD&I related to heat 
pump technologies (171). Austria is also involved in 
Important  Projects  of  Common  European  Interest 
(IPCEI) 
and 
hydrogen,  which  are  expected  to  facilitate  further 
research  and  development  and  initiate  additional 
activities in these key strategic value chains.   

on  microelectronics, 

batteries 

Transforming the car industry  

Similar  to  other  parts  of  Europe,  Austria’s 
automotive supplier industry is struggling for 
global  competitiveness  in  the  midst  of  the 
shift  to  electric  vehicles.  The  automotive 
supplier  industry  is  an  important  industrial  sector 
in  the  country,  which  directly  employed  36  200 
people  in  2023  (172)  and  had  an  export  quota  of 
above  80%  (173),  with  around  40%  of  exports 
going  to  Germany.  This  shows  that  a  significant 
part of Austrian production is directly destined for 
the  German  market,  with  some  of  the  largest 
suppliers very closely linked to German automotive 
companies.  Difficulties  in  the  German  market 
therefore  also  impact  Austrian  companies  in  the 
automotive value chain. Weak demand for electric 
cars  as  well  as  insolvencies  and  production  stops 
impact  the  competitiveness  of  this  industrial 
sector  as  well  as  hamper  Austria’s  transition  to 
sustainable transport.  

Critical raw materials  

Austria  is  highly  dependent  on  imports  of 
raw  materials,  such  as  metals  and  fossil  fuels, 
which  are  particularly  important  for  industrial 
sectors 
like  the  metalworking  and  electrical 
industries.  The  mining  sector,  including  iron  ore, 
magnesite,  tungsten,  salt,  talc  and  leukophyllite, 
kaolin,  iron  mica  and  graphite,  is  also  largely 
dependent  on  economic  developments  in  the  raw 
materials and financial markets, as well as on the 
downstream  industries.  The  challenging  economic 
situation,  which  led  to  a  decrease  in  gross  value 
added  in  the  manufacturing  of  goods  by  more 
than  2%  in  2023  also  had  a  negative  impact  on 
Austrian mining,  as  well  as  on  the  steel  and  non-
ferrous metal industries (174).   

The  country’s  own  raw  materials  industry 
forms the basis for generating about 25% of 
Austria’s  GDP,  according  to  Ministry  of  Finance 
estimates (175). Regarding its import concentration, 
which  measures  how  much  a  country  relies  on  a 
limited number of sources for most of its imports, 
the  country  slightly  outperforms  the  EU  average 
(176).  Around  80  million  tonnes  of  mineral  raw 
materials  are  extracted  every  year  from  mining, 
both  underground  and  above-ground.  In  the  field 
of  construction  raw  materials  such  as  sand  and 
gravel, Austria is self-sufficient (177). Austria is also 
home  to  one  of  the  largest  lithium  deposits  in 
Europe, though extraction has not started. 

for 

Austria’s manufacturing depends on a secure 
supply  of  primary  and  secondary  raw 
materials 
like 
strategic 
renewable  energy,  digital  technologies,  and 
national  waste 
defence. 
management  plan  (178),  Austria  highlights  waste 
streams relevant to critical raw material (CRM) and 
their  status.  For  a  few  areas,  an  accumulation  of 

sectors 

2023 

the 

In 

(170) European Environment Agency, 2024, Eco-innovation index in 

Bmf.gv.at. 

Europe, Eea.europa.eu. 

(175) Federal Ministry of Finance, Mining in Austria, Bmf.gv.at. 

(171) Joint Research Centre Clean Energy Technology 

Observatory, 2024, Heat Pumps in the European Union, 
Setis.ec.europa.eu. 

(176) European Commission, 2024, Single Market and 

Competitiveness Scoreboard, strategic dependencies on raw 
materials, Ec.europa.eu. 

(174) Federal Ministry of Finance, 2024, Austrian Mining Yearbook, 

(172) Austrian Economic Chamber, 2024,, ARGE AUTO, 2024, Arge-

(177) Federal Ministry of Finance, Mining in Austria, Bmf.gv.at. 

auto.at. 

(173) Austrian Economic Chamber, 2024, Austria’s automotive 

industry, 2024, Fahrzeugindustrie.at. 

(178) Federal Ministry of Climate Action, Environment, Energy, 

Mobility, Innovation and Technology, 2023, General Waste 
Management Plan, Bmk.gv.at. 

61 

 
 
 
CRM  waste  stream  is  recognised,  as  for  CRMs  in 
PV  panels.  CRM  recycling  is  often  carried  out  in 
cooperation  with  other  Member  States,  as  is  the 
case  for  lithium  batteries.  Austria  has  recycling 
capacity  for  certain  metals, 
like  wolfram  or 
vanadium.  

In  2021,  Austria  adopted  its  Raw  Materials 
2030  masterplan,  which  aligns  with  the 
objectives  set  in  the  Critical  Raw  Materials 
Act. Its main objectives are to secure the supply of 
primary  and  secondary  mineral  raw  materials  in 
Austria  and  strengthen  supply  chains,  innovation 
and the circular economy (179).  

Technical 

Commission’s 

As  part  of  the  master  plan  and  supported  by  the 
Support 
European 
Instrument,  Austria  has  already  developed  a 
roadmap for a future Comprehensive Raw Material 
Balance (180). The implementation of other projects 
is  ongoing  (181).   Austria  also  aims  to  cooperate 
with  international  companies  working  in  the  field 
of  circular  economy  and  increase  the  traceability 
of  CRMs  by  setting  up  an  information  system  as 
between 
well 
stakeholders  via  dialogue  and  a  dedicated 
platform.  

collaboration 

increasing 

as 

The  circular  use  of  material  is  also  key  to 
reducing dependence on imports. Over the last 
decade,  Austria’s  circular  material  use  rate  has 
the  EU  average,  with 
increased,  surpassing 
Austria’s resource productivity also above average 
(182).  At  84%  in  2022,  the  recycling  rate  for  e-
waste,  a  key  source  of  critical  raw  materials,  is 
also  above  the  EU  average.  The  reuse  and 
recycling  rate  for  end-of-life  vehicles  is  slightly 
below the EU average (86% vs. 89% in 2022). This 
points to the need to avoid the leakage of critical 
raw materials, notably as the car industry shifts to 
battery-electric vehicles.  

Climate mitigation 

Industry decarbonisation 

in 

emissions; 

greenhouse 

the  EU (183). 

Manufacturing produces more than a third of 
Austria’s 
its 
manufacturing  is  fairly  emissions  intensive, 
dominated  by  emissions  related  to  process  and 
product  use.  At  35%,  the  share  of  industry  in 
Austria’s  total  greenhouse  gas  emissions  is  the 
In  2022, 
second  highest 
manufacturing production in Austria emitted 320 g 
CO2eq  of  greenhouse  gases  per  euro  of  gross 
value  added  (GVA),  almost  a  fifth  more  than  the 
EU overall (270 g). Since 2017, emissions intensity 
in Austrian industry declined by 17%, less than the 
EU  average  (20%).  With  60%,  the  share  of 
greenhouse 
industry 
processes and product use is the fourth highest in 
the  EU;  the  remainder,  energy-related  emissions, 
have a lesser role in its manufacturing.  

emissions 

related 

to 

Graph A7.1: GHG emission intensity of manu-
facturing and energy-intensive sectors, 2022 

Source: Eurostat. 

Austria’s  manufacturing  sector  has  seen 
improvements  in  energy  efficiency  and  both 
energy-related 
process-related 
and 
emissions  intensity,  but  there  is  room  for 
more.  Between  2017  and  2022,  the  greenhouse 
energy-related 
intensity  of 
gas 
emissions  declined  by  9%  in  Austria,  albeit  much 

emissions 

(179) Federal Ministry of Finance, 2021, Masterplan Raw Materials 

2030, Bmf.gv.at. 

(180) European Commission, 2022, Roadmap for a future 
Comprehensive Raw Material Balance, Ec.europa.eu. 

(181) Federal Ministry of Finance, 2024, Monitoring report, 

Bmf.gv.at. 

(182) European Commission, Raw Materials Information System, 

Country Profiles, Austria, Rmis.jrc.ec.europa.eu. 

(183) In  2023.  Manufacturing  includes  all  divisions  of  the  “C” 
section  of  the  NACE  Rev.  2  statistical  classification  of 
economic  activities.  In  the  remainder  of  this  section,  unless 
indicated  otherwise,  data  on  manufacturing  refer  to  the 
divisions  of  the  NACE  section  C  excluding  division  C19 
(manufacture  of  coke  and  refined  petroleum  products),  and 
the  year  2022.  The  source  of  all  data  in  this  section  is 
Eurostat;  data  following  the  UNFCCC  Common  Reporting 
Framework (CRF) are from the European Environment Agency 
(EEA), republished by Eurostat. 

62 

00.511.522.533.54C-C19C17C20C23C24KG CO2eq / €AustriaEU-27 
 
  
 
less  than  the  EU  on  average (16%)  –  reaching 
110 g  of  CO2eq  per  euro  of  GVA (184).  Regarding 
industry  processes  and  product  use  in  the  same 
period, the reduction of the emissions intensity by 
14% also lagged behind the EU average, 23%. The 
energy  intensity  of  manufacturing  decreased  by 
about 13%, from 1.3 GWh per euro of GVA to 1.1 
GWh/€,  around  the  EU  average.  The  share  of 
electricity  and  renewables  in  the  final  energy 
consumption  of  manufacturing  remained  around 
49%,  placing  Austria  eighth  in  the  EU  in  this 
regard.  

Austria’s  energy-intensive 
industries  are 
facing  challenges.  Energy-intensive  sectors (185) 
account for 15% of Austria’s manufacturing gross 
value  added  (2022).  Among  these,  in  2022,  with 
0.8  kg  and  3.7 kg  CO2eq/€  of  GVA, 
the 
manufacture  of  paper  and  paper  products  and 
basic  metals  and  metal  products  recorded  levels 
of  emissions  intensity  above  the  EU  average  (0.6 
kg and 3.5 kg). Like other EU Members, Austria too 
has  suffered 
from  significant  energy  price 
increases lately, with the electricity price for large 
consumers  being  the  seventh  highest  in  2023  in 
the  EU (186).  Between  2021  and  2024,  Austria’s 
energy-intensive  industries  reduced  production  by 
up to about 15%.  

Austria  has  put  in  place  policies  to  support 
the  decarbonisation  of  industry,  but  more 
implemented 
work 
measures  to  promote  industry  decarbonisation, 

is  needed.  Austria  has 

(184) For the GHG emissions intensity of GVA related to energy use 
and  industrial  processes  and  product  use  respectively,  GHG 
emissions  are  from  inventory  data  in  line  with  the  UNFCCC 
Common  Reporting  Format  (CRF),  notably  referring  to  the 
source sectors CRF1.A.2 –  fuel combustion in manufacturing 
industries  and  construction  and  CRF2  –  industrial  processes 
and  product  use.  The  CRF1.A.2  data  broadly  correspond  to 
the NACE C and E sectors, excluding C-19. GVA data (in the 
denominator  for  both  intensities)  are  aligned  with  this 
sectoral  coverage.  Therefore,  they  are  not  fully  consistent 
with the data referred to in other part of this section.  

(185) Notably,  the  manufacture  of  paper  and  paper  products 
(NACE  division  C17),  of  chemicals  and  chemical  products 
(C20),  “other”  non-metallic  mineral  products  (C23;  this 
division includes manufacturing activities related to a single 
substance of mineral origin, such as glass, ceramic products, 
tiles,  and  cement  and  plaster),  and  basic  metals  (C24).  To 
date,  these  industries  are  energy-intensive  –  i.e.  consuming 
much  energy  both  on  site  and/or  in  the  form  of  purchased 
electricity  –  and  greenhouse  gas  emissions  intensive,  in 
various combinations. 

(186) For a detailed analysis of energy prices, see Annex 8 on the 

affordable energy transition. 

Act, 

laws  such  as 

the  Hydrogen 
including  key 
the  Renewable  Energy 
Promotion  Act  and 
Expansion 
like 
programmes 
funding 
‘Transformation der Industrie’ and ‘Transformation 
der  Wirtschaft’,  as  well  as  the  dialogue  process 
‘klimaneutrale  Industrie  Österreich’.  To  further 
encourage  decarbonisation 
in  manufacturing, 
Austria  could  complement  the  existing  toolkit  by 
supporting  the  development  of  new  low-carbon 
technologies,  the  scaling  up  of  existing  solutions 
and  the  promotion  of  sustainable  supply  chains 
and circular economy practices. 

Graph A7.2: Manufacturing industry production: 
total and selected sectors, index (2021 = 100), 
2017-2023 

Source: Eurostat, 2024, sts_inpr_a. 

Reduction  of  emissions  in  the  effort  sharing 
sectors 

To  attain  its  2030  effort  sharing  target, 
Austria  needs 
to  swiftly  specify  and 
implement further climate mitigation policies 
(187).  In  2023,  greenhouse  gas  emissions  from 
Austria’s  effort  sharing  sectors  are  expected  to 
have been 23.3% below those of 2005.  By 2030, 
current  and  planned  policies  and  measures  are 
expected to lead to a decrease of 41.7% in 2030, 
leaving a gap of 6.3 percentage points to Austria’s 
effort  sharing  2030  target.  Additional  measures, 
latest 
which  are  not 
reduce  emissions, 
projections,  would 

into  Austria’s 

included 

further 

in  Regulation 

(187) The national greenhouse gas emission reduction target is set 
(the  Effort  Sharing 
(EU)  2023/857 
out 
Regulation).  It  applies  jointly  to  buildings  (heating  and 
cooling); road transport, agriculture; waste; and small industry 
(known as the effort sharing sectors). 

63 

7075808590951001051102017201820192020202120222023ManufacturingManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of other non-metallic mineral productsManufacture of basic metals 
 
      
 
achieving  a  total  of  46.1%.  While  Austria  could 
bridge  this  gap  by  using  domestic  flexibilities 
available under the effort sharing regulation, swift 
and  steady  adoption  will  be  critical  for  the 
implementation  of  the  full  set  of  measures  given 
the large distance between current and additional 
measures (188).  

Graph A7.3: Greenhouse gas emissions in the 
effort sharing sectors, 2005 and 2023 

Source: European Environment Agency 

Sustainable industry 

Circular economy transition 

Despite  positive  trends,  there  is  room  for 
boosting Austria’s circularity transition.  With 
14.3%  in  2023,  and  on  the  rise  since  2020, 
Austrias’s circular use of material is above the EU 
average  (11.8%)  but  far  behind  EU  leaders. 
Resource  productivity,  too,  was  above  the  EU 
average in 2023, with EUR 3.2 per kg of material 
consumed.  Austria’s  resource  productivity  has 
been  almost  constantly  improving  over  the  past 
decade; 
negative 
environmental impacts and reduce dependence on 
volatile raw material markets.  

helps  minimise 

this 

In  December  2022,  Austria  adopted  its  Circular 
Economy  Strategy (189)  which  sets  several  key 

(188) The  effort  sharing  emissions  for  2023  are  based  on 
inventory  data.  The  final  data  will  be 
approximated 
established 
review. 
Projections  on  the  impact  of  current  policies  (“with  existing 
measures”,  WEM)  and  additional  policies  (“with  additional 
measures”, WAM), as per Austria’s final updated NECP. 

in  2027  after  a  comprehensive 

(189) Kreislaufwirtschafts-Strategie, 2022, Link. 

64 

targets:  reducing  domestic  material  consumption 
to  14  tonnes  per  person  annually  by  2030  and 
lowering  the  material  footprint  to  7  tonnes  per 
person  annually  by  2050.  Austria  also  aims  to 
increase resource efficiency by 50% by 2030 and 
raise the  material  use  rate  from  the  current  12% 
to  18%,  which  falls  short  of  the  EU  Circular 
Economy  Action  Plan  goals.  Additionally,  private 
household  material  consumption  is  to  be  reduced 
by  10%  by  2030.  A  Repair  Bonus  Scheme (190) 
supported  by  the  Recovery  and  Resilience  Facility 
aims  to  give  broken  electronic  devices  a  ‘second 
chance’, thus increasing the number of refurbished 
and repaired electrical and electronic equipment, in 
line  with  circular economy  objectives.  The  support 
programme provides funding for households in the 
form of vouchers that cover 50% of the costs for 
repairing  or  renewing  electrical  and  electronic 
equipment (and since 2024 also bikes).  

but 

Austria’s waste generation is too high and is 
increasing, 
country’s  waste 
the 
management  practices  show  improvements. 
Austria’s 
total  waste  generation  shows  a 
significant increase from 2012 onwards. This trend 
is primarily driven by the largest waste categories, 
namely soils and mineral waste from construction 
and demolition. Recyclable wastes increased while 
the  generation  of  mixed  waste  decreased, 
indicating improvements in waste management. At 
803  kg  per  person  in  2022,  Austria  produces  the 
highest amount of waste per capita and far more 
than  the  EU  average  of  513  kg.  Still,  with  a 
recycling rate of 62.6%, it ranks 2nd in the EU for 
municipal  waste  recycling.  And  it  is  on  track  to 
meet the 2025 recycling (except plastic packaging) 
and  the  2035  landfilling  targets.  On  1 January 
2025,  Austria  launched  a  deposit  return  system 
for  single-use  beverage  containers  (a  measure 
under  its  recovery  and  resilience  plan).  Through 
this system, Austria aims to reach a collection rate 
of  80%  in  2025  and  90%  in  2027.  In  2022,  at 
25%,  its  recycling  rate  for  plastic  packaging  was 
far below the EU average of 41%. In 2022, 69.2% 
of construction and demolition waste was recycled, 
which  was  a  big  drop  from  2020  for  which  no 
explanation has been provided. Austrians’ material 
footprint  is  only  slowly  decreasing  and  stands  at 
22 tonnes per person, which is very high compared 
to the EU average of 14.2 tonnes per person.  

(190) Bundesministerium für Klimaschutz, Umwelt, Energie, 

Mobilität, Innovation und Technologie, 2024, Reparatur-
Bonus, Link. 

010203040506020052023MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
      
 
 
Austria  has  the  12th  highest  amount  of emissions 
of heavy metals to water and is in 17th position for 
emissions  intensity,  with  0.49  kg  in  damage  to 
health  and  the  environment  per  billion  EUR  GVA 
(below  the  EU  average intensity  of  0.86  kg/billion 
EUR  GVA).  The  main  contributors  to  emissions  to 
water  in  Austria  are  the  ferrous  metal  sector  for 
heavy metals, the pulp, paper and wood sector for 
total phosphorus and total organic carbon, and the 
chemical  and  food  and  drink  sector  for  total 
nitrogen.  Two  ubiquitous  and  persistent  bio-
accumulative  and  toxic  substances  (brominated 
ethers  and  mercury)  are  the  reason  all  surface 
waterbodies 
in  Austria  fail  to  achieve  good 
chemical  status.  On  23.  September  2024, Austria 
published its “Action Plan on PFAS” (192). It calls for 
measures  to  reduce  pollution  by  these  dangerous 
chemicals,  promotes  communication  on  dangers 
and risks and supports coordinated action.  

Austria  needs  to  invest  more  in  pollution 
prevention  and  control.  For  2022,  some  3 300 
deaths  a  year  were  attributed  to  fine  particulate 
matter  (PM2.5)  pollution;  780  deaths  to  nitrogen 
dioxide, and 1 400 to ozone. To meet its objectives 
for  pollution  prevention  and  control  and  address 
the health and economic costs of pollution, Austria 
needs  to  provide  an  additional  EUR  855  million  a 
year  (0.19%  of  GDP),  mostly  related  to  clean  air 
and noise (193).  

in 

the 

investment 

Current 
circularity 
transition  has  been  insufficient.  Austria  is 
estimated  to  need  total  additional  investment 
worth  at  least  EUR  750  million  per  year  for  the 
circular  economy 
including  waste 
transition, 
management.  Of  the  circular  economy  gap,  EUR 
175  million  relates  to  recent  initiatives,  such  as 
eco-design  for  sustainable  products,  packaging 
and  packaging  waste,  labelling  and  digital  tools, 
critical  raw  materials  recycling  and  measures 
proposed  under  the  amended  Waste  Framework 
Directive.  An  additional  EUR  492  million 
constitutes  further  investment  need  to  unlock 
Austria’s circular economy potential (191).   

Zero pollution industry 

Austria  has  been  making  considerable 
progress  in  reducing  air  pollution,  which  is 
now  decoupled  from  GDP  growth.  The 
reduction  commitments 
2020-2029  emission 
under 
the  National  Air  Pollution  Control 
Programme  have  been  met  except  for  ammonia 
(NH3),  and  the  commitments  for  the  2030s  are 
projected  to  be  met  as  well,  except  for  NH3.  An 
infringement  procedure  has  been  opened  against 
Austria (and other Member States) for not meeting 
its  emissions  reduction  commitments  for  2020-
2029  with  regard  to  NH3.  However,  Austria 
submitted its updated national air pollution control 
programme (NAPCP) to the Commission on 8 April 
‘with  additional  measures’ 
2024.  Under  the 
scenario,  Austria  projects  to  meet  its  emissions 
reduction commitments for 2030 onwards for NH3 
too.  In  2023,  no  exceedances  above  the  limit 
values  set  by  the  Ambient  Air  Quality  Directive 
were registered in Austria. However, for several air 
quality  zones, 
the  target  values  for  ozone 
concentrations have not been met.  

Water  pollution  from  industry  is  falling,  but 
the  accumulation  of  toxic  substances  puts 
chemical  pressure  on  surface  water  bodies. 
Between  2010  and  2022,  industrial  releases  of 
pollutants  to  water  have  decreased  by  33%  for 
heavy  metals  (Cd,  Hg,  Pb  and  nickel),  by  4%  for 
nitrogen,  by  14%  for  organic  carbon  and  by  22% 
for phosphorus.  

(191) European Commission, DG Environment, Environmental 

(193) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

(192) Federal Ministry for Climate, 2024, PFAS-Aktionsplan, Link. 

65 

 
 
 
Table A7.1:  Key clean industry and climate mitigation indicators: Austria 

Source:  Net zero industry: European Commission: The net-zero manufacturing industry landscape across Member States: final 
report, 2025. Automotive industry transformation: Eurostat. Critical raw materials: Eurostat. Climate mitigation: See 
footnotes in the "climate mitigation" section; reduction of effort sharing emissions: EEA greenhouse gases data viewer; European 
Commission, Climate Action Progress Report, 2024. Sustainable industry: Years of life lost due to PM2.5: Eurostat and EEA, 
Harm to human health from air pollution in Europe: burden of disease status, 2024. Air pollution damage: EEA, EU large industry 
air pollution damage costs intensity, 2024. Emissions covered: As, benzene, Cd, Cr, Hg, NH3, Ni, NMVOC, NOX, Pb, dioxins, PM10, 
PAH, SOX. Water pollution intensity: EEA, EU large industry water pollution intensity, 2024. Releases into water covered from 
cadmium, lead, mercury, nickel. Other indicators: Eurostat. 

66 

Strategic autonomy and technology for the green transitionNet zero industryOperational manufacturing capacity 2023- Solar PV (c: cell, w: wafer, m: module), MW400-800 (m)- Electrolyzer, MW-- Wind (b: blade, t: turbine, n: nacelle), MW-- battery, MWh800-850Automotive industry transformation201720182019202020212022202320182021Motorisation rate (passenger cars per 1000 inhabitants), %555562566570572566566539561New zero-emission vehicles, electricity motor, %1.541.982.816.4213.9115.8919.911.038.96Critical raw materials201720182019202020212022202320182021Material import dependency, %44.544.444.343.442.541.524.222.6Climate mitigationTrendIndustry decarbonisation201720182019202020212022202320172022GHG emissions intensity of manufacturing production, kg/€0.380.340.350.370.360.320.310.340.27Share of energy-related emissions in industrial GHG emissions61.061.658.960.459.460.860.044.842.5Energy-related GHG emissions intensity of manufacturing120.0117.5116.8121.9117.2109.6-158.4132.9and construction, kg/€Share of electricity and renewables in final energy consumption49.749.349.148.048.749.551.143.344.2in manufacturing, %Energy intensity of manufacturing, GWh/€1.251.201.191.241.181.101.041.291.09Share of energy-intensive industries in manufacturing production14.57.3GHG emissions intensity of production in sector [...], kg/€- paper and paper products (NACE C-17)0.840.820.880.890.880.820.92-0.730.68- chemicals and chemical products (NACE C20)0.980.780.780.730.920.890.72-1.251.26- other non-metallic mineral products (NACE C23)1.771.831.752.011.871.681.79-2.532.24- basic metals (NACE C24)3.012.682.973.143.743.703.51-2.793.49Reduction of effort sharing emissions20182019202020212022202320182023GHG emission reductions relative to base year, % -14.7-19.0-23.3- domestic road transport-1.9-1.7-14.9-11.9-16.7-20.41.45.2- buildings-36.5-34.6-34.7-29.2-40.1-50.721.432.92005202120222023TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %57.048.646.243.7-48.0-18.2-6.3Sustainable industryTrendCircular economy transition20182019202020212022202320182021Material footprint, tonnes per person23.923.622.325.324.822.014.715.0Circular material use rate, %11.8      11.5      11.4      11.3      12.4      14.3      11.611.1Resource productivity, €/kg2.5        2.5        2.4        2.5        2.9        3.2        2.12.3Zero pollution industryYears of life lost due to PM2.5, per 100,000 inhabitants580      421      335      353      508      -702571Air pollution damage cost intensity, per thousand € of GVA    14.7          27.5      Water pollution intensity, kg weighted by human factors per bn € GVA    0.5   0.9AustriaEU-27AustriaEU-27AustriaEU-27 
 
 
 
 
  
 
ANNEX 8: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  enhancing 
energy  competitiveness  and  affordability, 
while advancing the transition to net zero. It 
examines  the  measures  and  targets  proposed  in 
the  final  updates  to  the  national  energy  and 
climate plans (NECPs) for 2030. 

Austria  has  made  significant  progress  in  its 
clean  energy  transition  pathway,  having 
phased out coal in 2020, and with no nuclear 
energy  (by  law)  and  no  Russian  gas  imports 
the  beginning  of  2025.  Further 
since 
electrification  of  its  energy  system  would  be 
useful  to  achieve  100%  in  renewables  electricity 
by  2030.  Austria  has  accelerated  renewables 
deployment but it would be beneficial if it were to 
improve 
renewables  permit  process  and 
continue  working  on  further  grid  expansion  and 
more  efficient  use  of  its  energy  system  by 
increasing flexibility. 

its 

Energy prices and costs 

Graph A8.1: Retail energy price components for 
household and non-household consumers, 2024 

negatively to the cost of electricity for households, 
reducing total prices by almost 9%.  

Industrial electricity and gas prices have also 
declined  by  23%  and  9%  respectively.  Both 
values are close to the EU average, with electricity 
being slightly above and gas slightly below the EU 
value. For electricity, taxes constitute only 2.2% of 
electricity cost for industry, compared to 15.4% on 
average across the EU.   

Wholesale  electricity  prices  in  Austria  were 
81.5  EUR/MWh  in  2024(194),  below  the  EU 
average of 84.7 EUR/MWh, largely attributed 
to  a  significant  share  of  renewables  in 
Austria’s  electricity  mix  (87%  in  2024).  But 
within  the  broader  Central  Western  European 
(CWE)  region,  Austria  experienced  price  spikes 
during spring and summer, and this occurred amid 
rising  natural  gas  costs.  These  price  increases 
were followed by a stronger surge in autumn and 
winter.  A  colder  winter in the  region  led to  higher 
consumption,  with  a  +3.4%  rise  in  November  to 
December  2024  compared  to  the  same  period  in 
2023.  Additionally, 
lower  hydropower  with  a 
40.3%  decline  during  the  same  period  due  to 
conditions  and 
unfavourable  meteorological 
limited  non-fossil  flexibility  further  worsened  the 
supply-demand  gap.  While  increased  imports(195) 
helped to partially mitigate this gap, the remaining 
shortfall  was  largely  filled  by  costly  natural  gas-
fired  generation,  which 
in 
November  to  December  2024  compared  to  the 
same  period  in  2023.  As  a  result,  concentrated 
price  spikes  occurred,  particularly  in  the  evening 
hours  (18:00-21:00),  when  solar  output  declined, 
and demand increased(196). 

rose  by  62.2% 

(i) For household consumers, consumption band is DC for 
electricity and D2 for gas. Taxes and levies are shown 
including VAT. 
(ii) For non-household consumers, consumption band is ID for 
electricity and I4 for gas. Taxes and levies are shown 
excluding VAT and recoverable charges, as these are typically 
recovered by businesses. 
Source: Eurostat 

Households’  retail  electricity  and  gas  prices 
have  declined  year  on  year  by  4%  and  14% 
respectively.  Electricity  is  slightly  below  the 
EU  average,  and  gas  above.  Taxes  contribute 

(194)Source: Fraunhofer (ENTSO-E data).   
(195) Austria had net electricity imports of 1.15 TWh in November 
and December 2024, an increase of 0.05 TWh compared to 
the same months in 2023. 

(196) Source:  Yearly  electricity  data,  Ember  (consumption  and 

generation data throughout the paragraph). 

67 

 
 
 
 
 
 
 
Graph A8.2: Monthly average day-ahead wholesale 
electricity prices and European benchmark 
natural gas prices (Dutch TTF) 

(i) the Title Transfer Facility (TTF) is a virtual trading point for 
natural gas in the Netherlands. It serves as the primary 
benchmark for European natural gas prices. 
(ii) CWE gives average prices in the central-western European 
market (Belgium, France, Germany, Luxembourg, the 
Netherlands and Austria). 
Source: S&P Platts and ENTSO-E 

Flexibility and electricity grids 

Austria is in the Core (197) and Italy North (198) 
capacity  calculation  regions (199).  Italy  North 
mostly  meets  the  target  for  the  margin 
available  for  cross-zonal  electricity  trade, 
but  the  Core  region  does  not.  Member  States 
should  ensure  that  a  minimum  of  70%  of 
technical  cross-border  capacity  is  available  for 
trading.  Austria’s  national  action  plan  aims  to 
increase  cross-border  capacities 
to  70%  by 
the  electricity  grid  and  address 
reinforcing 
uncoordinated electricity flows, like loop flows and 
flows  from  non-EU  countries.  Austria  issued  a 
derogation  due  to  excessive 
loop  and  other 
uncoordinated flows. A derogation enables a lower 
level  of  trades  for  a  time-limited  period  when 
needed for operational security reasons.  

(197) Core is the Capacity Calculation Region (CCR) which covers 

Austria, Belgium Czechia, Germany, France, Croatia, Hungary, 
the Netherlands, Poland, Romania, Slovenia, Slovakia and, 
once connected, Ireland. 

(198) France, Italy, Austria and Slovenia are part of the Italy North 

CCR. 

(199) A CCR is a group of countries which calculate cross-border 

electricity trade flows together. 

or 

25%. 

Seven 

storage 

projects 

By 2025, Austria’s electricity interconnection 
electricity 
exceed 
will 
transmission 
of 
common/mutual  interest  (PCI/PMI)  aim  to 
improve  Austria’s  electricity  network  and 
that of the region. These projects are: Kaunertal 
Storage Extension, Cluster Austria  – Germany,  the 
Würmlach  (AT)  and  Somplago  (IT)  and  the  Lienz 
(AT)  and  Veneto  (IT)  interconnector.  The  PCI/PMI 
list  also  includes  the  GreenSwitch  (AT,  HR,  SI) 
smart  grid  project,  the 
Italy-Austria-Germany 
hydrogen  corridor  and  the  generic  hydrogen 
electricity 
corridor. 
interconnector, the GreenSwitch smart grid project 
and  the  two  hydrogen  corridors  are  also  central 
and  south-eastern  Europe  energy-connectivity 
(CESEC) (200) 
infrastructure 
electricity-priority 
projects  under  close  monitoring  by  its  high-level 
group. 

Lienz-Veneto 

The 

In  April  2024,  Austria  became  the  first 
country  in  the  EU  to  present  an  integrated 
network  infrastructure  plan.  This  plan  covers 
the  development  of  electricity  and  gas  networks, 
aiming for Austria to achieve climate neutrality by 
2040. 

in  renewables 
Despite  achieving  growth 
generation,  Austria  curtailed  an  average  of 
6 500 MWh of electricity per month In 2024. 
Austria’s transmission system operator, APG, plans 
to  invest  EUR 9 billion  up  to  2034  in  a  high-
capacity electricity infrastructure, storage facilities 
and  digital  intelligence  to  fully  capitalise  on  the 
planned growth rates of renewables in the coming 
years.  The  simplification  and  acceleration  of 
approval 
indispensable 
are 
preconditions in this context (201). 

procedures 

Austria  is  advancing  in  non-fossil  flexibility, 
despite  some  challenges.  A  draft  Electricity  Act 
is  in  preparation.  It  aims  to  remove  regulatory 
barriers that currently limit flexible resources, like 
demand-side  response  and  storage,  from  fully 
participating 
intraday 
markets.  The  country  has  4 300 MW  of  electricity 
storage,  mainly  from  hydro  power  storage  plants 
and pumped hydro (the latter approx. 3 600 GWh). 
Batteries  add  around  40-50 MW.  The  country 
plans  5.9 GW  of  additional  storage  by  2035  and 

in  the  day-ahead  and 

(200) central-and-south-eastern-europe-energy-connectivity_en. 
(201) Source: www.apg.at/en/news-press/apg-june-evidences-pv-

boom-and-need-for-grid-expansion-in-austria/. 

68 

 
 
 
 
has  200-300 MW  of  demand  response  capacity. 
The  Climate  and  Energy  Fund  allocates  EUR 250 
million  (2022-2026)  for  storage  at  renewable 
sites. Major future projects include the Limberg III 
pumped hydro plant (480 MW, 850 GWh) and PCI 
projects  like  the  Kaunertal  Storage  Extension  (64 
GWh)  and  the  Pumped  Hydroelectric  Energy 
Storage RIEDL (3.5 GWh). 

to 

needs 

enhance 

Austria  is  making  progress  with  regard  to 
smart-meter rollout and energy communities, 
but 
consumer 
empowerment  in  demand  response,  dynamic 
pricing and smart grids. Electricity consumers in 
Austria,  both  household  and  non-household,  can 
access  market-based  offers,  like  fixed  price/term, 
dynamic  price  and  average  monthly  spot-price 
contracts.  In  2023,  83%  of  households  and  87% 
of  non-household  contracts  were  fixed-priced  (EU 
average:  73%),  up  35%  from  2022.  In  2023 (202), 
household electricity  switching rates rose to 3.8% 
(+1.6%  compared  to  2022),  while  non-household 
consumers  dropped  to  4%  (-2.5%  compared  to 
2022). Austria met its target of equipping 80% of 
households with smart meters in 2023 (203), ahead 
of  its  2024  goal,  and  has  established  646 
renewable  energy  communities  and  69  citizen 
energy communities (204). 

final 

energy 

In  2023,  electricity  accounted  for  22.3%  of 
Austria’s 
consumption, 
marginally  below  the  EU  average  of  22.9%. 
This  share  has  increased  steadily  over  the 
past  decade (205).  When  it  comes  to  households, 
electricity  accounts  for  28.6%  of  final  energy 
consumption, while in industry it represents 29.2% 
(see  also  Annex  7).  For  the  transport  sector,  this 
share remains negligible at 4.2%. Further progress 
in electrification across sectors is required for cost 
the  economy  and 
effectively  decarbonising 
bringing  the  benefits  of  affordable  renewable 
generation to consumers. 

Renewables and long-term contracts 

•  2024  was  a  record  year  for  Austria  in 
renewables,  with  87% (206)  of  its  electricity 
coming  from  renewable  energy  sources  (RES), 
mainly from hydropower, solar and wind (vs EU 
overall RES share of 47%), and 39% of heating 
and cooling. Installed renewables capacity grew 
by  9.3%  in  2024  (vs  EU  growth  of  11.5%), 
reaching  a  total  of  28,864 MW  renewable 
energy  capacity(207)  (see  Graph  A8.3).  In  2023, 
the  country  installed  0.3 GW  of  wind  (+7% 
compared to 2022) and 2.6 GW of solar (+69% 
compared to 2022), significantly exceeding the 
2022  solar  levels(208).  However,  2024  saw  a 
decline  in  solar  photovoltaic  (PV)  installations 
with  a  total  of  2.2 GW  installed,  due  to  a 
commercial  rooftop  market (209)  slowdown  and 
almost  no  new  wind  capacity (210).  RES  grid 
connection  waiting  times  remain  substantial, 
with  up  to  eight  years  being  reported  for 
ground-mounted solar PV projects (211). 

Graph A8.3: Austria's installed renewable capacity 
(left) and electricity generation mix (right) 

“Other” includes renewable municipal waste, solid biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Ember 

Austria  improved  RES  permitting  processes 
and  prioritised  energy  transition  projects  by 
Impact 
reforming 
Assessment  Act.  This 
included 
positive steps in integrated grid planning and 
transparency  on  available  grid  capacities. 

Environmental 
reform 

the 

(202) Idem. 
(203) Idem. 
(204) energiegemeinschaften.gv.at/landkarte/. 
(205) CAGR (Compound Annual Growth Rate) of 0.9% between 
2013 and 2023 and minimum/maximum share of 20.4% 
and 22.3%, respectively. 

(206) Yearly electricity data, Ember. 
(207) Renewable capacity statistics 2025, IRENA. 
(208) Idem. 
(209) Solar Power Europe, EU Market Outlook for Solar Power 

2024-2028. 

(210) www.energy-charts.info/. 
(211) Solar Power Europe, EU Market Outlook for Solar Power 

2023-2027. 

69 

 
 
 
 
the 

transposition  of 

However, 
revised  EU 
permitting  rules  was  delayed  due  to  national 
elections  and  divided  competencies  between  the 
federal  and  state  level.  There  is  thus  room  for 
further  improvement  to  reduce  the  length  of  the 
RES  permit-granting  procedure,  especially  taking 
into  consideration  the  guidance  on  speeding  up 
permit-granting  procedures.  There  is  an  ongoing 
infringement  procedure  against  Austria  for  failure 
to transpose the permit-granting provisions of the 
revised Renewable Energy Directive. 

Austria  sets  more  ambitious  renewables 
targets  in its  final  updated NECP.  By  2030,  it 
aims  to  reach  100%  RES  in  the  electricity  sector, 
53% in heating and cooling and 43% in transport. 

Austria  recently  moved  from  feed-in  tariffs  to 
auction-based  market  premium  support 
for 
renewables,  with  a  first  tender  in  2024.  However, 
more  clarity  is  needed  on  the  future  support 
schedule,  as  only  the  auctions  for  2024-2025 
have  been  published  on  the  Union  Renewable 
Development  Platform.  As  part  of  European  wind 
power  action,  Austria  committed  to  installing 
1.4 GW  of  onshore  wind  capacity  between  2024 
and 2026. 

power 

renewable 

purchase 
Currently, 
agreements (PPAs) are limited in Austria, with 
0.1 GW  contracted (212).  Austria  plans  to  enhance 
its legal framework for PPAs, according to its final 
updated NECP. 

Energy efficiency 

Austria  has  made  progress 
in  energy 
efficiency,  but  further  measures  could 
usefully  be  implemented  to  reach  its  2030 
targets.  In  2023,  primary  energy  consumption 
(PEC)  dropped  by  3.2%  to  29.35 Mtoe,  and  final 
energy  consumption  (FEC)  decreased  by  3.8%  to 
24.17 Mtoe.  Compared  to  2022,  FEC  fell  in  most 
sectors: 7.5% in industry, 6% in services and 4.9% 
in  residential.  However,  FEC  increased  in  the 
transport  sector  by  1%.  According  to  the  recast 
EED (213),  Austria  should  try  to  reach  a  PEC  of 
24.9 Mtoe and an FEC of 21.6 Mtoe by 2030. The 
measures  and  associated  savings  currently 

(212) PPA deal tracker  - RE-Source Platform. 
(213) Energy Efficiency Directive (EU) 2023/1791. 

70 

for 

opportunities 

reported are not enough to reach the new savings 
target.  Austria  has  completed  an  assessment 
identifying 
high-efficiency 
cogeneration  and  efficient  district  heating  and 
cooling, in line with Article 25(1) of the recast EED. 
Decarbonising  heating  and  cooling  in  Austria  is 
achievable  under  specific  conditions,  such  as 
renovating  buildings,  decarbonising  electricity  and 
integrating 
heat  while 
decarbonising the industry. 

industrial  waste 

It would be useful if Austria were to step up 
efforts  in  the  residential  sector  to  meet  its 
2030 building  decarbonisation  goals,  set  out 
in  the  latest  long-term  renovation  strategy. 
Although 
residential  energy  use  decreased 
between  2022  and  2023,  it  has  been  mostly 
stagnant  or  slightly  rising  since  2018  if  climate 
adjustments are taken into account. 

In  2022,  heating  and  cooling  made  up  83%  of 
Austria’s  residential  final  energy  consumption. 
About  55 000  heat  pumps  were  sold  in  2023,  a 
9%  drop  compared  to  2022.  The  Renewable 
Heating Act (Erneuerbare-Wärme-Gesetz) of 2024 
bans  fossil-based  boilers  in  new  buildings  as  of 
2025,  and  financial  support  for  replacing  them 
with  low-carbon  options  has  been  significantly 
increased for existing buildings. 

efficiency 

Austria’s  national  financing  framework  for 
investments  mostly 
energy 
includes  grants  and  blended  schemes.  In 
2024,  Austria  continued  to  implement  various 
financing  measures,  mainly  for  companies,  to 
enhance energy efficiency through new equipment, 
technology  development  and  research  projects. 
The  focus  is  on  heating-related  measures  that 
benefit  businesses  and  some  households.  Key 
schemes include housing subsidies, replacing fossil 
fuel boilers with efficient systems  such as district 
heating  and  heat  pumps,  and  switching  from 
fossil-fuel-based  heating 
climate-friendly 
systems.  Funding  supports  SMEs,  industry,  the 
residential and district heating sectors. 

to 

energy 

Austria 

poverty, 

Despite  having  put  in  place  measures  to 
is 
address 
experiencing a rise in households facing or at 
risk of energy poverty (see also Annex 11) and 
lacks  clear  targets.  The  EU-SILC  survey  shows 
that in 2023, 3.9% of households  were unable to 
keep  their  homes  sufficiently  warm  (+1.2%  from 
2022),  and  6.9%  had  payment  arrears 
(on 
rent,  utility  bills  or  hire 
mortgages  or 

 
 
purchase) (214)  (+2.2%  since  2022).  Austria  uses 
two  indicators:  (1)  households  at  risk  of  poverty 
with  high  energy  costs  (3.6%  in  2022)  and  (2) 
households unable to keep their homes sufficiently 
warm (215). Austria has some measures to combat 
energy  poverty,  like  energy  cost  subsidies  and 
housing benefits, but lacks specific targets (216). 

2030 represented 0.14%(221) of Austria’s GDP(222), 
below  the  EU  weighted  average  of  0.49%.  Tax 
measures accounted for 99% of this volume, while 
the 
share  were  direct  grants. 
Additionally,  Austria’s  2023  Effective  Carbon 
Rate(223)  averaged  EUR  89.88  per  tonne  of  CO₂, 
above the EU weighted mean of EUR 84.80(224). 

remaining 

Security of supply and diversification 

its 

long-term  gas 
Austria’s  OMV  ended 
supply  contract  with  Gazprom  Export  in 
November  2024.  With  Russian  gas  transit  via 
Ukraine  ending  on  1 January  2025,  Austria  had 
secured  gas  imports  from  Norway,  Germany,  and 
Italy,  ensuring  a  smooth  transition.  Additionally, 
Austria  reduced  its  gas demand  by  21%  between 
August  2022  and  November  2024,  improving 
energy security and decreasing reliance on Russian 
gas. 

of 

8% 

coal 

gross 

Two thirds of Austria’s overall energy mix in 
2023 remained reliant on fossil fuels, with oil 
accounting  for  36%,  natural  gas  19%  and 
(imported) 
inland 
consumption (217),  while  renewables  (and  biofuels) 
contributed to 36% (218). This reliance underscores 
the  importance  of  Austria’s  ongoing  efforts  in  its 
energy  transition  to  diversify  its  energy  sources 
and strengthen energy security. In 2023, 40.8% of 
gross  final  energy  consumption  in  Austria  came 
from  renewable  sources,  up  by  6.8 percentage 
point compared to 2022(219). 

Fossil fuel subsidies 

In  2023,  environmentally  harmful(220)  fossil  fuel 
subsidies  without  a  planned  phase-out  before 

(214)ec.europa.eu/eurostat/databrowser/view/ilc_mdes01/default/t

able?lang=en. 

(215) Based on Austria’s final updated NECP. 
(216) Idem. 
(217) Electricity and heat are excluded to avoid double counting 

focusing on primary energy sources. 
(218) Gross inland consumption (Eurostat). 
(219) Gross final energy consumption (Statistics | Eurostat). 

(220) Direct fossil fuel subsidies that incentivise maintaining or 
increasing in the availability of fossil fuels and/or use of 
fossil fuels. 

(221) Numerator is based on volumes cross-checked with the 

Austrian authorities. For all Member States, it includes public 
R&D expenditures for fossil fuels as reported by the IEA 
(Energy Technology RD&D Budgets) and excludes, for 
methodological consistency, excise tax exemption on 
kerosene consumed in intra-EU27 air traffic. 

(222) 2023 Gross Domestic Product at market prices, Eurostat. 

(223) The Effective Carbon Rate is the sum of carbon taxes, ETS 
permit prices and fuel excise taxes, representing the 
aggregate effective carbon rate paid on emissions. 

(224) OECD (2024), Pricing Greenhouse Gas Emissions 2024 

71 

 
 
 
Table A8.1:  Key Energy Indicators 

Source: Eurostat, ENTSO-E, S&P Platts 

72 

20212022202320242021202220232024Household consumer - Electricity retail price (EUR/KWh)0.2250          0.2309              0.2700              0.2584          0.2314              0.2649          0.2877          0.2879          Energy & supply [%]33.1%49.7%76.3%77.2%36.6%54.3%55.6%47.8%Network costs30.0%29.8%28.9%31.6%26.7%25.3%24.8%27.2%Taxes and levies including VAT36.8%20.6%-5.2%-8.8%36.7%20.3%19.6%25.0%VAT16.7%16.7%16.7%16.7%14.5%13.4%13.8%14.6%Household consumer - Gas retail price0.0665          0.1005              0.1518              0.1301          0.0684              0.0948          0.1121          0.1128          Energy & supply47.4%59.2%66.2%60.6%43.7%61.0%64.5%53.9%Network costs25.7%17.6%13.0%15.4%22.5%17.3%17.1%18.3%Taxes and levies including VAT26.9%23.2%20.8%24.0%33.8%21.7%18.4%27.8%VAT16.7%16.6%16.7%16.2%15.5%11.6%10.2%13.6%Non-household consumer - Electricity retail price0.1138          0.1844              0.2272              0.1756          0.1242              0.1895          0.1971          0.1661          Energy & supply42.6%65.7%69.6%64.9%43.0%66.5%63.0%55.8%Network costs20.3%12.7%12.2%16.6%15.8%10.7%11.9%15.5%Taxes and levies excluding VAT24.5%5.9%1.9%2.2%30.4%9.9%11.2%15.4%Non-household consumer - Gas retail price0.0378          0.0776              0.0540              0.0492          0.0328              0.0722          0.0672          0.0517          Energy & supply63.1%74.7%70.3%66.0%66.2%77.3%77.3%68.7%Network costs6.4%3.3%5.7%6.0%7.7%3.8%5.3%7.1%Taxes and levies excluding VAT16.7%6.6%9.3%14.6%12.5%6.1%7.3%11.6%Wholesale electrity price (EUR/MWh)106.5260.6102.581.6111.0233.299.184.7Dutch TTF (EUR/MWh)n/an/an/an/a46.9123.140.534.420172018201920202021202220232024Gross Electricity Production (GWh)71,324          68,618              74,234              72,558          70,887              69,193          74,459          -Combustible Fuels21,296       19,900           20,865           18,368       18,678          19,013       15,492       -Nuclear-              -                 -                 -              -                 -              -              -Hydro42,175       41,219           44,204           45,344       42,678          39,141       44,523       -Wind6,572         6,030             7,450             6,792         6,740            7,242         8,037         -Solar1,269         1,455             1,702             2,043         2,774            3,783         6,395         -Geothermal0                 0                     0                     0                 0                    0                 0                 -Other Sources13               13                  13                  12               16                  15               12               Gross Electricity Production [%]Combustible Fuels29.9%29.0%28.1%25.3%26.3%27.5%20.8%-Nuclear0.0%0.0%0.0%0.0%0.0%0.0%0.0%-Hydro59.1%60.1%59.5%62.5%60.2%56.6%59.8%-Wind9.2%8.8%10.0%9.4%9.5%10.5%10.8%-Solar1.8%2.1%2.3%2.8%3.9%5.5%8.6%-Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-Other Sources0.0%0.0%0.0%0.0%0.0%0.0%0.0%-Net Imports of Electricity (GWh)6,5468,9473,1292,1967,5438,705-72-As a % of electricity available for final consumption 10.0%13.6%4.7%3.4%11.3%13.2%-0.1%-Electricity Interconnection [%]15.3%42.4%38.1%37.6%31.5%31.3%30.3%29.0%Share of renewable energy consumption - by sector [%]Electricity71.6%74.2%75.1%78.2%73.9%74.8%87.8%-Heating and cooling33.7%34.2%33.9%35.0%33.4%31.3%39.4%-Transport9.7%9.9%10.1%10.3%9.6%10.7%13.2%-Overall33.1%33.8%33.8%36.5%34.8%34.1%40.8%-20202021202220232020202120222023Import Dependency [%] 58.4%51.8%74.2%61.1%57.5%55.5%62.5%58.3%of Solid fossil fuels 97.8%99.4%99.9%102.0%35.8%37.2%45.9%40.8%of Oil and petroleum products 97.5%90.4%94.7%96.2%96.8%91.7%97.8%94.5%of Natural Gas 73.4%51.0%149.1%101.6%83.6%83.6%97.6%90.0%Dependency from Russian Fossil Fuels [%]of Natural Gas 0.0%0.0%0.0%0.0%41.0%40.9%20.7%9.3%of Crude Oil10.0%7.0%1.4%0.0%25.7%25.2%18.4%3.0%of Hard Coal12.7%13.3%12.0%11.4%49.1%47.4%21.5%1.0%20172018201920202021202220232024Gas Consumption (in bcm)9.4                 8.9                     9.3                     8.8                 9.3                    8.2                 7.0                 Gas Consumption year-on-year change [%]7.5%-5.3%4.4%-4.9%5.8%-12.3%-14.3%Gas Imports - by type (in bcm)8.5                 7.8                     11.4                  6.5                 4.8                    12.2               7.1                 Gas imports - pipeline8.5                 7.8                     11.4                  6.5                 4.8                    12.2               7.1                 Gas imports - LNG0.00.00.00.00.00.00.0AustriaEU 
 
   
 
ANNEX 9: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

its 

for 

risks 

country 

Austria is confronted with increasing climate 
and  environmental  challenges  that  have 
implications 
economic 
competitiveness.  With  a  near  2 °C  increase  in 
average  annual  surface  temperature  since  1880, 
the 
from 
faces  heightened 
heatwaves  and  landslides,  along  with  shifting 
precipitation  patterns 
that  exacerbate  heavy 
rainfall and drought conditions. At the same time, 
biodiversity  remains  under  threat,  with  many 
habitats and species  having a poor or bad status, 
undermining  ecosystem  services  that  are  vital  for 
sectors such as agriculture and construction. With 
56%  of  electricity  already  being  produced  by 
hydropower,  the  necessary  impoundments  are 
having  a  negative  impact  on  the  status  of  water 
bodies.  Austria  will  need to  find  the  right  balance 
between  renewable  energy  production  and  the 
protection/restoration of ecosystems. 

Climate adaptation and preparedness 

annual 

average 

Austria’s 
surface 
temperature  has  increased  by  nearly  2 °C 
since  1880,  resulting  in  increased  climatic 
hazards.  Urban  areas  are  particularly  exposed to 
heatwaves,  while  mountainous 
regions  will 
experience  more  landslides  and  rockfall  due  to 
thawing  permafrost.  Although  Austria’s  annual 
precipitation  will  remain  relatively  stable,  the 
country is likely to see more frequent and intense 
heavy rainfall events, as well as an increased risk 
of  droughts,  due  to  changes  in  precipitation 
patterns and rising evapo-transpiration rates (225). 

Climate 
risks  directly  affect  Austria’s 
economy and society. Between 1980 and 2023, 
Austria  recorded  EUR 14.7  billion  in  economic 
losses  due 
to  weather  and  climate-related 
extreme  events,  with  just  19%  of  these  losses 
insured (226).  Budgetary  risks  are  expected  to 
increase,  driven  by  higher  costs  for  repairing  and 
maintaining public infrastructure, as well as rising 
healthcare  expenditure  due 
to  heat  stress, 
prolonged  allergy  seasons  and  new  infectious 

(225) Federal Ministry for Climate Action, Environment, Energy, 
Mobility, Innovation and Technology, 2024, The Austrian 
Strategy for Adaptation to Climate Change, Link. 

diseases (227). These health risks disproportionately 
including  older 
affect  vulnerable  populations, 
people,  pregnant  women,  children  and  individuals 
with  chronic  illnesses  or  disabilities.  In  September 
2024,  Austria  experienced  heavy  rainfall  and 
flooding,  which  caused  estimated  damage  of  at 
least  EUR 1.3  billion  and  affected  around  700 
companies.  While  annual  investments  of  EUR 60 
million  in  flood  prevention  helped  mitigate  the 
damage, the event sparked a debate about how to 
better  protect  against  natural  disasters,  including 
the role of insurance in mitigating their impact. 

its 

120 

plan 

with 

over 

completed 

Austria  has  been  proactively  addressing 
climate  change  adaptation. 
In  2012,  the 
country  was  one  of  the  first  in  the  EU  to  link 
strategic  concepts  to  concrete  action  plans.  In 
2024,  the  country  released  its  third  climate 
adaptation  strategy  (NAS  3.0),  which  includes  an 
action 
specific 
recommendations  across  14  areas  of  activity. 
Regular  reports  track  progress,  with  the  next  one 
to be published in 2026. By that year, Austria will 
also  have 
revised  national 
assessment of climate vulnerabilities, impacts and 
risks.  Furthermore,  the  National  Heat  Protection 
Plan,  which  was  first  published  in  2017,  was 
extensively  updated  in  2024  with  a  special  focus 
on  vulnerable  groups.  To  underpin  these  efforts, 
Austria  invests  around  EUR  4  million  annually  in 
the  Austrian  Climate  Research  Programme. 
Furthermore,  Austria  has  effective  regional  and 
for 
local 
practitioners (228),  the  natural  hazard  and  climate 
change  check  for  municipalities (229),  and  the 
funding  programme  for  climate  change  and 
adaptation  model  regions  (KLAR!)  (230),  which 
supports  over  800  municipalities  and  more  than 
2.2  million  inhabitants  in  91  regions.  With  KLAR! 
Invest,  the  programme  offers  additional  support 
for  implementation  and  scaling  up.  Moreover, 
building  on  the  EU  Mission  on  Adaptation  to 
Climate  Change,  Austria  developed  a  central 
efficient 
to 
competence 
information  exchange  and  synergies.  The  country 
also  recognises  exemplary  climate  adaptation  by 

such  as  a  network 

initiatives, 

facilitate 

centre 

(227) WIFO, 2024, Budgetäre Kosten und Risiken durch 

klimapolitisches Nicht-Handeln und Klimarisiken, Link. 

(228) Klimawandel Anpassungsnetzwerk, Link. 

(229) Umweltbundesamt, Vorsorgecheck Naturgefahren im 

Klimawandel, Link. 

(226) EEA, 2024, Economic losses from weather- and climate-

(230) Klima- und Energiefonds, Klimawandel-

related extremes in Europe, Link. 

Anpassungsmodellregionen (KLAR!), Link. 

73 

 
 
 
 
 
 
the 

municipalities,  with  the  first  CliA  State  Award 
presented  in  2024.  In  addition,  climate  change 
adaptation  measures  are now  eligible  for  funding 
under 
communal 
federal  government’s 
investment  programme,  with  EUR  500  million 
allocated from 2025 to 2027. Austria uses also EU 
funding  schemes  to  support  national  adaptation 
policy  processes.  One  example  is  the  LIFE  project 
AMooRe  -  Austrian  Moor  Restoration,  which 
supports  the  implementation  of  the  Peatland 
Strategy Austria 2030+ (231). 

Water resilience 

in  Austria  has  slightly 
Water  quality 
improved, but concerns remain regarding the 
chemical  status  of  surface  water  bodies. 
Austria’s  third  river  basin  management  plan 
(2022-2027)  under 
the  Water  Framework 
Directive  shows  that  the  ecological  status  and 
potential  of  surface  water  bodies  (SWBs)  has 
slightly  improved  since  the  second  plan,  with 
almost  half  of  them  (49%)  classified  as  having 
good  or  better  ecological  status/potential.  The 
main pressures are impoundments for hydropower 
and  flood  protection.  In  2020,  56%  of  electricity 
was produced by hydropower and Austria plans to 
add a further 5 TWh of hydropower capacity to the 
grid  by  2030.  New  construction  projects  require 
scrutiny  as  they  will  have  substantial  impacts  on 
terrestrial  and  aquatic  ecosystems.  With  80%  of 
its  hydropower  plants  currently  failing  to  meet 
minimum  ecological  requirements,  Austria  will 
need to find the right balance between renewable 
energy  production  and  the  protection/restoration 
of  ecosystems.  As  regards  the  chemical  status  of 
SWBs,  the  situation  has  remained  alarming,  with 
100%  failing  good  status.  On  the  other  hand,  all 
groundwater  bodies  monitored  showed  a  good 
quantitative  status  in  2021.  In  terms  of  their 
there  has  been  a  slight 
chemical  status, 
deterioration,  though  most  water  bodies  are  still 
reported as having good chemical status. The main 
pollutants are nitrates, pesticides, ammonium and 
sulphate. 

On  average,  there  is  currently  no  water 
stress  in  Austria,  though  there  are  regional 

(231) Bundesministerium für Land- und Forstwirtschaft, Regionen 

und Wasserwirtschaft, LIFE AMooRe – Austrian Moor 
Restoration, Link. 

in 

for 

and 

plant 

growth 

demographic 

and seasonal differences and drought during 
growing  periods  is  now  the  greatest  limiting 
factor 
certain 
agricultural  regions.  This  trend  is  expected  to 
intensify in the future. The water exploitation index 
plus  (WEI+)  stands  at  2.1%  in  2022,  which  is  far 
below the 20%  that is generally  considered to be 
an  indication  of  water  scarcity.  Nevertheless, 
projections 
climatological 
suggest  that  Austria’s  ground  water  resources 
could drop by up  to 23% by 2050 due to climate 
change  and  population  growth (232).  Austria’s 
response  involves  plans  for  more  abstractions 
from  the  Danube  (233).  However,  this  could  have 
long-term 
ecosystems 
for 
dependent  on 
the  Danube.  The  European 
Commission  decided  to  open  an  infringement 
procedure  by  sending  a  letter  of  formal  notice  to 
Austria in July 2024 for failing to comply with the 
Water 
the 
Framework  Directive 
surveillance of water rights (234). 

consequences 

regarding 

Austria  fully  complies  with  the  Urban 
Wastewater  Treatment  Directive,  and  with 
continued  investment  in  water  management, 
the  country  is  well-positioned  to  achieve  its 
broader  environmental  targets.  Austria  has 
reached  the  target  for  collecting  and  treating 
urban waste water to fully comply with the Urban 
Wastewater 
Treatment  Directive.  However, 
significant investments are needed to ensure high-
quality  water  management.  Total  annual  water 
investment needs are estimated at EUR 1.5 billion, 
covering 
industry,  protection  and 
management. The largest portion, EUR 813 million, 
is  for  wastewater  management,  including  costs 
from  the  revised  Directive,  with  EUR 441  million 
needed  for  drinking  water 
investments  and 
EUR 224  million 
for  water  protection  and 
management.  Austria  faces  an  annual  water 
investment  gap  of  EUR 389  million  (0.09%  of 
GDP)  to  meet  environmental  targets  under  the 
Water Framework and Floods Directives. Over half 
investment  gap,  or  EUR 200  million 
of  the 
annually,  is  related  to  waste  water  (see  Graph 
A9.2). 

the  water 

(232) Ministry of Agriculture, Regions and Tourism, 2021, Austria’s 

Water Treasure, Link. 

(233) Austria’s Court of Auditors, 2024, Klimakrise – 
Herausforderungen für die Wasserwirtschaft in 
Niederösterreich, p. 68, Link. 

(234) INFR(2024)2162. 

74 

 
 
 
Biodiversity and ecosystems 

Graph A9.1: Direct dependency(1) on ecosystem 
services(2) of the gross value added generated by 
economic sector in 2022 

Despite evident improvements in the level of 
site  protection  and  increased  restoration 
efforts  over  recent  decades,  the  status  of 
many  habitats  and  species  in  Austria  is  still 
bad.  According  to  the  most  recent  report  on 
Article 17  of  the  Habitats  Directive,  covering 
2013-2018,  18%  of  habitats  are  classified  as 
having  a  favourable  status,  35%  a  poor  status, 
and 44% a bad status. Although habitats having a 
favourable status have increased by 4% compared 
to  the  previous  reporting  period,  there  is  an  even 
greater increase of almost 6% in habitats reported 
as having a bad status. For species, there has not 
been  much  change  compared  to  the  previous 
reporting  period,  with  14.5%  of  species  having  a 
favourable status, 48.4% a poor status and 33.9% 
a  bad  status.  This  situation  has  implications  for 
Austria’s  climate 
loss  of 
biodiversity  impairs  ecosystems’  ability  to  provide 
services  that  help  mitigate  the  effects  of  climate 
cycles, 
change, 
maintaining soil health and sequestering carbon. 

regulating  water 

resilience,  as 

such  as 

the 

(1) Dependency based on the sector’s own operations, 
excluding value chain operations within countries and across 
international value chains. A high dependency indicates a high 
potential exposure to nature-related shocks or deteriorating 
trends, which means that the disruption of an ecosystem  
service could cause production failure and severe financial 
loss. 
(2) Ecosystem services are the contributions of ecosystems to 
the benefits that are used in economic and other human 
activity, including provisioning services (e.g. biomass 
provisioning or water supply), regulating and maintenance 
services (e.g. soil quality regulation or pollination), and cultural 
services (e.g. recreational activities). 
Source: Hirschbuehl et al., 2025, The EU economy's 
dependency on nature, Link. 

Nature  degradation  creates  significant  risks 
to  Austria's  economy  and  competitiveness. 
The  overall  dependency  of  Austria’s  economy  is 
slightly above the EU average, with 46% of gross 
value  added  having  a  high  direct  dependency  on 
ecosystem  services.  In  particular,  several  sectors, 
such  as  agriculture,  fisheries,  construction  and 
water  utilities 
(see  Graph  A9.1),  are  highly 
dependent  on  ecosystem  services,  with  100%  of 
the  gross  value  added  of  these  sectors  directly 
dependent on ecosystem services. This means that 
failure  to  maintain  the  capacity  of  ecosystems  to 
deliver  services  could  entail  significant  costs  or 
even  stop  production  in  these  sectors.  Protecting 
and  restoring  key  ecosystems  would  ensure  that 
the  long-term  competitiveness  of  these  economic 
sectors is preserved. 

75 

0%20%40%60%80%100%AgricultureForestryFishery and acquacultureMining and metalsConstructionWater utilitiesHealthcare deliveryAviation travel and tourismFood beverages and tobaccoSupply chain and transportPublic services and othersElectricityChemical and materials industryElectronicsOil and gasReal estateHeat utilitiesAutomotiveRetail consumer goods and…Information technologyBanking and capital marketsInsurance and asset…Digital communicationsHighMediumLow 
   
track 

to  achieve 

Targeted  action  on  nature  protection  and 
restoration  is  needed  to  meet  Austria’s 
nature restoration targets. Taking into account 
both Natura 2000 and other nationally-designated 
protected areas, Austria legally protects 29% of its 
land  areas  (EU-27  coverage  26%).  Austria  is 
therefore  on 
its  political 
commitment to protect at least 30% by 2030 and 
beyond,  as  outlined  in  its  national  biodiversity 
strategy (235). At the same time, land take and soil 
sealing remain very high in Austria. Total land use 
in  Austria  was  5 648 km² 
in  2022.  This 
corresponds  to  6.7%  of  the  country’s  area  and 
17.3%  of  the  permanent  settlement  area (236). 
While  urbanisation  and  development  pressures 
drive soil sealing, increasing awareness and policy 
shifts  are  helping  to  address  and  mitigate  its 
negative  impacts.  Sustainable  land  management 
practices and smart urban planning are becoming 
central  to  reversing  or  lessening  the  trend  in  soil 
sealing.  It  remains  to  be  seen  whether  the  newly 
adopted  ‘Soil  Strategy  for  Austria’  will  lead  to  a 
significant  reduction  in  land  take  and  soil  sealing 
by  2030 (237).  Austria  also  needs  to  restore  up  to 
5 624  km2  of  habitats  listed  in  Annex  I  to  the 
Habitats Directive, corresponding to up to 6.7% of 
its territory (238). Austria requires EUR 1.3 billion of 
investment  per  year  to  effectively  conserve  and 
restore its natural capital, mitigate the impacts of 
climate  change,  and  preserve  the  country’s  rich 
biodiversity  (see  Graph  A9.2.  The  current  level  of 
ecosystem 
biodiversity 
financing 
conservation in Austria is around EUR 400 million, 
leaving a gap of EUR 900 million. 

and 

for 

(235) Bundesministerium für Klimaschutz, Umwelt, Energie, 

Mobilität, Innovation und Technologie, 2022, Biodiversitäts-
Strategie Österreich 2030+, Link. 

(236) Österreichische Raumordnungskonferenz, 2022, Ergebnisse 

Österreich, Link. 

(237) Österreichische Raumordnungskonferenz, 2024, 

Bodenstrategie für Österreich, Link. 

(238) European Commission, 2022, Impact assessment 

accompanying the proposal for a Regulation on nature 
restoration. 

76 

Graph A9.2: Investment needs and gaps in EUR 
million, in 2022 constant prices 

Source: European Commission, DG Environment, 
Environmental investment needs & gaps assessment 
programme, 2025 update. 

Sustainable agriculture and land use 

Austria’s  carbon  removals  are  in  line  with 
the  level  of  ambition  needed  to  meet  its 
2030  target  for  land  use,  land  use  change 
and  forestry  (LULUCF).  Austria’s  forests  play  a 
major  role  in  carbon  removals.  To  meet  its  2030 
LULUCF target, additional carbon removals of -0.9 
million  tonnes  of  CO2  equivalent  (CO2eq)  are 
needed (239). Despite a declining trend in its carbon 
sink,  projections  for  2030  show  that  Austria  will 
have  a  surplus  compared  to  its  target  of  -3.4 
million tonnes of CO2eq (240). Therefore, Austria is 
on track to meet its 2030 target. 

is  a 

Austrian  agriculture 
source  of 
greenhouse  gas  emissions  and  has  a 
significant  impact  on  air,  water  and  soils, 
although a positive trend can be observed. In 
2022,  agriculture  was  responsible  for  a  total  of 
7.3  million  tonnes  of  CO2eq,  which  has  decreased 
slightly since 2018, accounting for around 10% of 
the  country’s  total  emissions.  This  includes  1.5 

(239) National LULUCF targets of the Member States in line with 

Regulation (EU) 2023/839. 

(240) Climate Action Progress Report 2024 COM/2024/498. 

 - 200 400 600 800 1,000 1,200 1,400 1,600BiodiversityWaterBaselineGap 
 
   
 
focus on soil and water protection, and from 2025 
onwards  agroforestry  strips  will  be  supported  as 
well.  Improving  animal  welfare  is  also  one  of  the 
focus 
of 
biodiversity-enhancing landscape features such as 
(fruit)  orchard trees, bushes, hedges, flower strips 
and bee pastures will increase to cover over 10% 
of the agricultural land by 2030. 

Furthermore, 

areas. 

share 

the 

million  tonnes  of  CO2eq  from  livestock  (also 
decreasing  since  2018).  Overall,  agricultural 
emissions  mainly  stem  from  animal  husbandry, 
soil  and  manure  management.  The  utilised 
agricultural area (UAA) in Austria decreased during 
the  last  decade  from  2 862  thousand  hectares  in 
2013  to  2 599  in  2023.  The  analysis  of  the  river 
basin  management  plan  has  identified  nutrients 
from  agriculture  as  a  significant  pressure  for 
groundwater/surface  water,  affecting  its  good 
status.  This  is  one  of  the  main  factors  in  the 
failure  to  meet  the  Water  Framework  Directive’s 
objectives.  According  to  data  from  the  Nitrates 
Directive,  7.2%  of  groundwater  monitoring 
stations 
in  Austria  recorded  average  nitrate 
concentrations  above  50 mg/l  between  2016  and 
2019, exceeding the healthy threshold for human 
consumption. However, the gross nitrogen balance 
on  agricultural  land  in  Austria  shows  quite  a 
positive trend, with 34.1 kg of nitrogen per hectare 
per year in 2019, more than 10 kg less than in the 
previous year. The livestock density index was 0.86 
in  2020,  thus  above  the  EU  average  of  0.75  but 
with a decreasing trend, while ammonia emissions 
have been rather stable between 2012 until 2022 
at around 63.6 thousand tonnes per year. The use 
of pesticides in Austria’s agricultural sector, which 
is  still  comparatively  low  compared  to  the  EU 
average  due  to  a  high  percentage  of  organic 
farming,  is  on  the  rise,  and  the  number  of 
groundwater  bodies  not  with  a  good  chemical 
status  due  to  pesticides  has  increased  since  the 
second river basin management plan. However, for 
surface  water  bodies  pesticides  were  nowhere 
near exceeding the permitted thresholds. 

land  had 

its  agricultural 

Austria  is  transitioning  to  a  sustainable  food 
system  by  implementing  policies  to  reduce  the 
environmental  impact  of  agriculture.  In  2022, 
landscape 
4.4%  of 
features  such  as  woods  and  non-productive 
grasslands,  below  the  EU  average  of  5.6%.  In 
2020,  organic  farming  made  up  almost  26%  of 
Austria’s  agricultural  land.  Under  its  common 
agricultural  policy  (CAP)  strategic  plan,  Austria 
aims to reach 30% of UAA under organic farming 
by  2030.  Several  measures  were  introduced  into 
the  Austrian  CAP  strategic  plan  to  improve  soil 
fertility, 
sequestration  and  nutrient 
management,  and  to  strengthen  biodiversity-
friendly  agriculture,  thus  contributing  to  climate 
change  mitigation (241).  Austria’s  eco-schemes 

carbon 

(241) Austrian CAP strategic plan, Link. 

77 

 
 
Table A9.1:  Key indicators tracking progress on climate adaptation, resilience and environment 

(1) The data show the average for the timespan 2006-2023 based on EFFIS - European Forest Fire Information System. 
(2) Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2024, Dashboard on insurance protection gap for natural catastrophes. 
(3) van Daalen, K. R. et al., 2024, The 2024 Europe report of the Lancet Countdown on health and climate change: unprecedented 
warming demands unprecedented action. The Lancet Public Health. 
(4) This indicator measures total water consumption as a percentage of the renewable freshwater resources available for a given 
territory and period. Values above 20% are generally considered to be a sign of water scarcity, while values equal or greater than 
40% indicate situations of severe water scarcity. 
(5) European Commission, 2024, seventh Implementation Report from the Commission to the Council and the European 
Parliament on the implementation of the Water Framework Directive (2000/60/EC) and the Floods Directive (2007/60/EC) (Third 
River Basin Management Plans and Second Flood Risk Management Plans). 
(6) For this indicator, the EU average includes figures for the UK under the previous configuration, EU-28. 
(7) European Commission, 2023, EU Bioeconomy Monitoring System dashboards. 
(8) Nitrates can persist in groundwater for a long time and accumulate at a high level through inputs from anthropogenic sources 
(mainly agriculture). The EU drinking water standard sets a limit of 50 mg NO3/L to avoid threats to human health. 
(9) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2024 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 – Annex IIa. 
Source: Eurostat, EEA 

78 

Climate adaptation and preparedness:20182019202020212022202320182021Drought impact on ecosystems6.982.320.262.669.550.076.772.76[area impacted by drought as % of total]Forest-fire burnt area (1)94            94            94            94            94            94            [ha, annual average 2006-2023]Economic losses from extreme events393          621          244          853          215          396          24 142       62 981       [EUR million at constant 2022 prices]Insurance protection gap (2)----1.25         1.25         [composite score between 0 and 4]Heat-related mortality (3)------[number of deaths per 100 000 inhabitants in 2013-2022]Sub-national climate adaptation action24            24            24            24            24            24            4144[% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:20182019202020212022202320182021Water Exploitation Index Plus, WEI+ (4)2.10.61.82.02.1-4.54.5[total water consumption as % of renewable freshwater resources]Water consumption1 591       543          1 560       1 682       1 593       -           [million m3]Ecological/quantitative status of water bodies (5)[% of water bodies failing to achieve good status]Surface water bodies---49%---59%Groundwater bodies---0%---93%Biodiversity and ecosystems:20182019202020212022202320182021Conservation status of habitats (6)18.0-----14.7-[% of habitats having a good conservation status]Common farmland bird index55.361.662.960.5--72.274.42000=100Protected areas---2929--26[% of protected land areas]Sustainable agriculture and land use:20182019202020212022202320182021Bioeconomy's added value (7)18 507     18 912     18 953     21 166     634 378     716 124     [EUR million]Landscape features----4              -[% of agricultural land covered with landscape features]Food waste--136134131-[kg per capita]Area under organic farming24.125.325.7--7.99-[% of total UAA]Nitrogen balance45.934.1----[kg of nitrogen per ha of UAA]Nitrates in groundwater (8)21.921.921.022.3--[mgNO3/l]Net greenhouse gas removals from LULUCF (9)5 222       2 437       5 843-       11 076-     4 474-       -           256 077-     240 984-     [Kt CO2-eq]AustriaEU-27AustriaEU-27AustriaEU-27AustriaEU-27 
 
  
 
FAIRNESS 
ANNEX 10: LABOUR MARKET 

levels 

continues 

labour  market 

Austria’s 
to 
demonstrate  resilience  but  faces  increasing 
structural  constraints.  Despite  two  years  of 
remain  high. 
recession,  employment 
However,  Austria’s  competitiveness  and  economic 
growth is hindered by  significant labour and skills 
labour  market  matching 
shortages,  declining 
efficiency,  a  high  tax  wedge  on  labour  and  the 
underrepresentation  of  some  groups 
the 
workforce. While the country is on track to achieve 
its  2030  employment  rate  target,  harnessing  the 
labour  market  potential  of  women,  older  workers, 
the  low-qualified  and  people  with  a  migrant 
background,  and  addressing  skills  and  labour 
shortages,  will  be  key  for  a  more  robust  and 
inclusive labour market and thriving economy. 

in 

Graph A10.1: Employment growth by sector 

at 

5.3%. 

including 

Consistent  with 

79.9%.  Nevertheless,  the  sluggish  economy  is 
increasingly  affecting  the  labour  market.  While 
employment  is  expanding  in  public  administration 
and  in  the  health,  care  and  education  sectors, 
which are less cyclically responsive, it is shrinking 
in the private sector, including manufacturing, with 
the  sharpest  decline  in  business-related  services. 
In  October  2024,  unemployment  increased  in 
several  sectors, 
retail,  construction, 
goods  production  and  hotels  and  restaurants (242). 
After  reaching  an  all-time  low  of  4.8%  in  2022, 
the  unemployment  rate  (15-74)  rose  to  5.2%  in 
2024 (EU: 5.9%) and is projected to remain high in 
2025 
these 
developments,  labour  market  slack,  reflecting  the 
unmet  need  for  labour,  increased  from  10.1%  in 
2022 to 10.7% in 2024 (EU: 11.7%). Resilience in 
the labour market has been partly supported by a 
0.9%  decline  in  working  hours  per  capita.  The 
economic recovery anticipated in 2025 is projected 
to  lead  to  an  accelerated  employment  growth  of 
0.7% (243), coupled with a marginal increase in the 
number  of  hours  worked,  as  Austria  faces  a 
in  working  hours (244).  The 
structural  decline 
simultaneous 
and 
employment 
in 
unemployment  also  suggests  supply-side  effects 
that  can  be  attributed  to  migration  and  the 
gradual  increase  in  women’s  statutory  retirement 
age,  from  60  to  65  between  2024  and  2033,  to 
match that of men.  

rise 

Severe  labour  and  skills  shortages  continue 
to  weigh  on 
the  country’s  economic 
competitiveness, innovation and growth. After 
reaching an all-time high of 5.3% in 2022, the job-
vacancy rate in industry, construction and services 
fell to 4% in 2024, with the strongest reduction in 
in  which  there  was  a  fall  of  1.1 
services, 
percentage  points 
(pps).  Despite  declining 
economic  output,  the  number  of  vacancies  - 
around  167 000  -  remains  among  the  highest  in 
the EU in relative terms, and the rate is well above 
the EU average of 2.4%. Overall, vacancy rates are 
higher in construction and services than in industry 
and  remained  particularly  high  in  the  metal 
industry  and  the  IT  and  care  sectors.  In  October 
2024,  the  proportion  of  employers  expecting 

(242) Arbeitsmarktservice Österreich, Arbeitsmarktübersicht 

Dezember, 2024.  

(243) WIFO, Economic Outlook 2024 and 2025, 2024.  

(244) See Employment Outlook der OECD.  

Source: Eurostat, National Accounts [namq_10_a10_e].  

Despite  a  second  consecutive  year  of 
labour  market  has 
recession,  Austria’s 
inflation, 
remained  broadly  stable.  High 
declining  investment,  lower  exports  and  weak 
private  consumption  have  held  back  economic 
activity, keeping Austria’s economy in an extended 
downturn.  Notwithstanding  these  headwinds,  the 
employment  rate (20-64),  at  77.4%  in  2024,  and 
the  activity  rate  (15-64),  at  78.2%,  remained 
broadly  unchanged  from 
the  previous  year. 
Employment  continued  to  be  marked  by  a  large 
proportion  of  part-time  work  (30.7%  vs  17.2%  in 
the  EU).  As  a  result,  the  country  remains  slightly 
short  of  its  2030  employment  rate  target  of 

79 

-250-200-150-100-50050100150200250thsATAgricultureIndustryConstructionTradable servicesNon-tradable servicesPublic sectorTotal 
 
 
   
 
 
 
to 

due 

years 

coming 

including 

transitions, 

labour shortages to limit their production was also 
higher in the service and construction sectors than 
in  industry (245).  Shortages  are  likely  to  worsen  in 
the 
unfavourable 
demographic  developments  and  the  green  and 
changing  skills 
digital 
requirements. A survey by the Wirtschaftskammer 
Österreich  (WKO)  indicates  that,  overall,  59%  of 
companies  were  affected  by  labour  and  skills 
shortages (246). 
undermine 
Austria’s efforts to improve its competitiveness, as 
they  hamper  innovation  and  reduce  revenues. 
Expanding  digital  and  AI  solutions,  along  with 
improved access to growth financing, are crucial to 
bridging  the  substantial  gap  between  high  labour 
demand  and  the  scarcity  of  skilled  workers (247) 
(see Annex 12).  

shortages 

These 

The  number  of  hours  worked  continues  to 
decrease,  as  part-time  work,  particularly 
among  the  high-qualified,  is  increasingly 
widespread  and  full-time  workers  work 
fewer hours. Over the last decade, the number of 
average  actual  weekly  hours  worked  per  person 
fell  from  35.8  hours  in  2014  to  33.9  hours  in 
2024,  with  a  notable  dip  (-1.6  hours)  at  the 
beginning  of  the  COVID-19  pandemic  from  which 
they  have  not  recovered.  This  decline  can  be 
attributed to two developments: i) in line with the 
rest of the EU, the number of actual weekly hours 
among  full-time  workers  declined  by  4.2%  since 
2019 to 39.1 hours in 2024. This reflects a long-
term trend which is particularly pronounced among 
men. At the same time, working hours of part-time 
workers  remained  stable.  Declining  full-time  work 
might partly be caused by labour hoarding on the 
demand side as companies try to hold on to skilled 
workers in a tight labour market, which also leads 
to a decreasing labour productivity. On the supply 
side,  the  effect  might  be  driven  by  a  change  in 
preferences  in  working  time  since  the  COVID-19 
pandemic. ii) Against the EU-wide trend, the share 
of  part-time  work  increased  in  Austria  over  the 
same period by 3.2 percentage points. Contributing 

(245) European Commission, European Business and Consumer 

Survey. 

(246) WKO, Unternehmensbefragung zum Arbeits- und 

Fachkräftebedarf/-mangel – Arbeitskräfteradar 2024, 2024. 
Companies were worst affected in personal services, food 
production, health and social care, as well as in the 
hospitality industry, construction and related trades, and in 
automotive trade including repair. 

(247) Digitaloffensive Österreich, Fachkräftemangel als Bedrohung 

für den Wirtschaftsstandort, 2024.  

to the scarcity of skilled labour, over the past ten 
years  the  number  of  part-time  workers  increased 
by 56% among the tertiary educated, almost twice 
the  rise  in  the  EU.  This  is  partly  due  to  labour 
taxation,  which  discourages  the  transition  from 
part-time to full-time employment, as Austria has 
one of the highest tax wedges on labour in the EU.  

Graph A10.2: Austria’s Beveridge curve 

Source: Eurostat, LFS and European Commission, EU Business 
and Consumer Surveys [une_rt_q, ei_bsin_q_r2]. Data 
seasonally adjusted. 

in 

unemployment 

While  an  outward  shift  in  the  Beveridge 
curve  indicates  a  long-standing  decline  in 
labour  market  matching  efficiency,  stark 
discrepancies 
rates 
between regions indicate low labour mobility. 
Over  the  past  decade,  Austria  has  experienced  a 
constant  increase  in  labour  market  tightness. 
Whereas  vacancy  rates  rose  steadily,  aside  from 
the  current  presumably temporary decline  amid  a 
rate 
the  unemployment 
recession, 
prolonged 
hovered  around  5%, 
leading  to  a  structural 
outward shift of the Beveridge curve (Graph A8.2). 
This  development,  spanning  all  regions,  can  be 
attributed  to  an  increasing  inefficiency  of  the 
Austrian labour market to match labour supply and 
demand.  This  is  particularly  evident  in  the  public 
sector (caused by worsening working conditions in 
the  healthcare  sector  such  as  lack  of  staff  and 
long  working  hours),  and  construction,  hospitality, 
wholesale, retail, and industry (248). There is also a 

(248) Christl, M. et al., The Effects of COVID-19 on Labour Market 
Matching in Austria: A Regional and Sectoral Perspective, 
Global Labor Organization (GLO), Essen, 2024.  

80 

2009201020112012201320142015201620172018201920202021202220230246810121416182345678Labour Shortage Indicator (%)Unemployment rate (% of labour force)AT 
 
   
 
illustrated  by 

the  major  discrepancy 

partial  lack  of  labour  mobility  in  the  country.  This 
in 
is 
unemployment rates (15-74) in 2023 between the 
capital  region  of  Vienna,  at  9.6%  (98 000  or 
almost  41%  of  all  unemployed  workers),  and  the 
other regions, with the lowest unemployment rate 
being  recorded  in  the  Salzburg  region  at  3%  (see 
Annex 17).  

to  have  substantial 
Austria  continues 
untapped  labour  market  potential  among 
women  due  to  high  part-time  employment 
In  2024, 
and  caregiving  responsibilities. 
activity and employment rates for women were at 
a high level in absolute terms (74.2% and 73.9%, 
respectively),  resulting  in  a  comparatively  narrow 
gender  employment  gap  (6.9  pps).  However,  at 
38.9  pps,  Austria  has  one  of  the  widest  gender 
gaps  in  part-time  employment  in  the  EU,  with 
more  than  half  of  women  working  part-time. 
Consequently,  in  terms  of  full-time  equivalents, 
the  gap  in  2023  was  three  times larger  (19  pps), 
significantly contributing to gender disparities. The 
unadjusted  gender  pay  gap  stood  at  18.3%  in 
2023,  and  the  gender  pension  gap  was  34.4%, 
well  above  the  EU  average  of  25.4%.  These 
disparities stem largely from the high participation 
of  women  in  unpaid  care  work  and  insufficient 
availability  of  and  access to  affordable  and  high-
quality  early  childhood  education  and  care  (ECEC) 
(see  Annex  12).  In  2023,  only  24.1%  of  children 
under 3 participated in formal ECEC (37.5% in the 
EU), far below the Barcelona target  for Austria of 
31.9%.  A  recent  study  suggests that  raising  ECEC 
participation  to  45%  for  children  under  3  from 
households  in  the  bottom  half  of  the  income 
distribution could increase maternal labour market 
participation  by  17% (249).  The  government 
continues  to  implement  measures  to  improve  the 
including 
availability  and  quality  of  ECEC, 
improving  the  attractiveness  of  the  teaching 
profession.  In  addition  to  other  target  areas,  the 
Zukunftsfonds  aims  to  improve  and  increase  the 
availability of childcare services, including through 
a compulsory childcare quota. Moreover, based on 
an  agreement  between  the  federal  government 
and the Laender, the government has agreed to a 
40%  rise  in  the  contribution  from  the  annual 
federal  budget  over  five  years  (EUR  200  million), 
matched  by  an  annual  contribution  of  EUR  63 
regions. 
million 

from 

the 

Graph A10.3: Activity and employment rates 

Source: Eurostat, LFS [lfsi_emp_q, lfsi_educ_q].  

the 

improving 

in  July  2024),  making 

Further 
labour  market 
participation  and  integration  of  low-skilled 
workers,  older  people,  those  from  migrant 
backgrounds  and  persons  with  disabilities 
could  ease  labour  market  tightness.  In  2024, 
low-qualified  people  (at  most  compulsory  schools 
-  Pflichtschule)  faced  three  times  the  risk  of 
redundancy  compared  to  those  with  professional 
qualifications (250).  Their employment rate of 57% 
in 2024 was 20.4 pps below the overall rate, and 
their  proportion  of  the  unemployed  remains  high 
(43.5% 
them  more 
vulnerable  to  structural  shifts  requiring  new  and 
better  skills.  Low  levels  of  basic  and  digital  skills 
remain  a  key  obstacle  to  their  labour  market 
integration  (see  Annex  12).  The  employment  rate 
of older workers (55-64) increased from 54.5% in 
2019  to  58.8%  in  2024,  yet  it  remained  well 
below 
the  EU  average  of  65.2%.  Despite 
significant gains in recent years, their activity rate, 
at  61.1%  in  2024,  also  lagged  behind  EU  rates 
are 
(68.2%). 
exacerbated  by  age  preference  on  the  part  of 
levels  of  digital  skills. 
employers  and 
the 
Government 
"Beschäftigungsinitiative 
[Employment 
Initiative  50+]  (EUR 165 million  annually)  aim  to 
facilitate  reintegration  through  wage  subsidies, 

Re-employment 

challenges 

measures 

50+" 

such 

low 

as 

(249) Narazani et al., More childcare for the poor? Budgetary 

impacts and female labour supply responses in Italy, Austria 
and Hungary, Applied Economics Letters, 2024. 

(250) Arbeitsmarktservice Österreich, Arbeitsmarktübersicht 

Dezember, 2024. 

81 

64666870727476788082010203040506070201520162017201820192020202120222023%Employment rate (20-64) (rhs)Activity rate (20-64) (rhs)Employment rate older workers (55-64) (lhs)Employment rate low-qualified (20-64) (lhs)Activitiy rate (55-64) (lhs)Employment rate women (20-64) (rhs)Activity rate women (20-64) (rhs) 
 
   
 
social  enterprises  and  job-related  qualification.  A 
substantial proportion of this assistance is devoted 
to  promoting  workplace  employment  promotion 
and  company-related  qualification  in  order  to 
address  skills mismatches.  While  the  employment 
rates of EU-country  nationals are similar to those 
of  Austrian-born  workers,  employment  is  lower 
among  people  born  outside  the  EU  (66.3%  in 
2024).  Measures  such  as  the  ‘Intensivprogramm 
Arbeitsmarktintegration’ have increased funding to 
integrate  refugees.  However,  only  37.9%  of 
displaced  people  from  Ukraine  aged  15-64  were 
active in the labour market as of March 2024, with 
considerable  differences  across  regions (251).  In 
terms  of  work  opportunities,  this  group  may 
benefit from enhanced incentives to take up work 
and  to  improve  language  skills.  In  2023,  the 
employment  gap  between  persons  with  and 
without  disabilities  increased  to  26.1  pps,  while 
Austria has not yet set up a target for employment 
of persons with disabilities. 

A  high  tax  wedge  on  labour  discourages 
longer  working  hours,  resulting  in  a  silent 
reserve  and  high  part-time  employment.  In 
2024,  21.8%,  or  almost  1.3  million  people,  of 
working  age  (15-64)  remained  outside  the  labour 
force.  Austria’s  tax  wedge  remains  among  the 
highest in the EU, hindering participation in the job 
market  (see  Annex  2).  With  a  tax  system  heavily 
reliant on labour income, the incentives to increase 
the  hours  worked  are  insufficient.  As  a  result,  at 
30.7%  in  2024,  part-time  work  remained  almost 
twice as a high as in the EU (17.2%).  

to 

Austria’s  recovery  and  resilience  plan  (RRP) 
and  the  European  Social  Fund  Plus  (ESF+) 
provide  comprehensive  support 
the 
unemployed  and  those  outside  the  labour 
force.  Tackling  unused  labour  market  potential, 
including  by  increasing  incentives  to  work  more 
hours  for  underemployed  people  and  improving 
skill 
to 
levels,  may  considerably  contribute 
addressing  shortages  and  reaching  the  2030 
targets  on  employment  and  skills.  Austria’s  RRP, 
with  a  total  value  of  EUR  4.5  billion,  focuses  on 
addressing  the  skills  needs  of  the  low-skilled  and 
long-term unemployed, increasing their chances of 
finding  work.  It  is  also  aimed  at  expanding  early 
childhood  education  and  care  so  that  women  can 
return  to  the  labour  market.  The  ESF+  and  Just 
Transition  Fund  (JTF)  Employment  programme  in 

Austria (2021-2027) is intended to improve access 
to  employment  by  providing  people  with  the 
necessary  skills  and qualifications to  thrive in  the 
evolving  labour  market,  while  addressing  social 
challenges  and  promoting  a  just  transition  to 
climate  neutrality.  The  programme  supports 
gender  equality,  encourages  the  participation  of 
older  workers  and  helps  young  people  transition 
from  school  to  employment.  It  also  provides 
targeted support to regions undergoing significant 
transformation  due  to  the  transition  to  climate 
neutrality.  Overall,  the  programme  is  expected  to 
benefit  over  27 000  people  through  various 
initiatives, including training, job opportunities and 
career counselling. 

Real wages rebounded markedly in 2024 but 
are  expected  to  moderate  in  2025.  Nominal 
wage  growth  is  projected  to  reach  3.1%  in  2025, 
significantly  lower  than  in  the  previous  years 
(5.0% in 2022, 6.6% in 2023 and 7.5% in  2024). 
In  real  terms,  wages  rose  by  4.6%  in  2024,  and 
are projected to increase further by 1.0% in 2025, 
following  decreases  in  2022  and  2023  (by  3.3% 
and 0.6% respectively) (252). The strong rebound in 
2024  is  due  to  both  higher  nominal  wage  growth 
and lower inflation (which decreased from 7.7% in 
2023  to  2.9%  in  2024).  This  recovery  helped 
recoup  losses  experienced  over  2022-2023.  With 
wage growth expected to decelerate in 2025, unit 
labour costs (ULCs) are set to rise by 2.7%, in line 
with  most  other  Member  States,  after  stronger 
increases  over  2023-2024  (respectively  by  8.7% 
and 8.2%). 

by 

job 

shifts 

driven 

Austria’s 

reallocation. 

declining 
Structural 
economic  activity  and  digitalisation  are 
reshaping 
labour  market, 
necessitating swift workforce reactivation to 
Structural 
manage 
transformations  are  having  a  detrimental  impact 
on 
traditional  sectors  such  as  automotive 
industries,  their  suppliers  and  the  metalworking 
industry,  resulting  in  layoffs  and  reduced  hiring, 
exacerbated  by  the  recession  and  rising  labour 
costs.  In  2024,  employment  in  Austria’s  energy-
intensive  industries  accounted  for  3.1%  of  total 
employment,  while  jobs  in  the  green  economy 
have  expanded  modestly.  Between  2016  and 
2022,  employment  in  the  environmental  goods 
and services sector grew by 16.4%, reaching 4.8% 

(251) AMS, Ukrainer auf dem Arbeitsmarkt, 2024.   

forecast. 

(252)Based on the European Commission Autumn 2024 economic 

82 

 
 
 
of  total  employment  (EU:  3.3%).  The  job  vacancy 
rate  in  construction,  a  key  sector  for  the  green 
transition,  is  well  above  the  EU  average  (5.9%  vs 
3.1%  in  2024),  highlighting  significant  shortages. 
The greenhouse gas emission intensity of Austria’s 
workforce  has  improved,  decreasing  from  13.3 
tonnes  per  worker  in  2015  to  11.8  in  2023  (EU: 
12.3),  reflecting  progress  on  the  green  transition. 
In  turn,  the  country  is  performing  above  the  EU 
average  in  digital  skills,  with  72.23%  of  the 
population  (25-64)  having  at  least  basic  digital 
skills in 2023 (EU: 64.74%).  

83 

 
ANNEX 11: SOCIAL POLICIES 

Austria  has  a  traditionally  strong  welfare 
system  and  social  conditions  remain  good 
overall.  However,  recent  periods  of  high  energy 
prices  and  elevated  inflation  have  put  its  social 
protection system under strain leading to negative 
developments,  notably  increasing  poverty  risks. 
This  will  require  close  monitoring  and  adequate 
policy  responses,  not  least  in  order  to  reach  its 
2030  national  target  on  poverty.  The  heightened 
risks  of  poverty  and  social  exclusion  for  children, 
single  parents,  those  with  a  migrant  background, 
and  older  people,  warrant  particular  attention.  In 
in 
addition,  some  of  the  social  allowances, 
particular  unemployment  benefits  have  not  been 
adjusted  for  inflation  while  others  like  the  top-up 
amounts  for  pensions  leave  individuals  below  the 
line  even  after  such  adjustments. 
poverty 
Maintaining  and  adapting  the  social  protection 
system  to  evolving  needs  will  help  Austria’s 
sustainable and inclusive growth and prosperity.  

Graph A11.1: AROPE rates 

Source: Eurostat [ilc_peps01n, tespm030, tespm010]. 

While 
the  at-risk-of-poverty  or  social 
exclusion  (AROPE)  rate  was  reduced,  the 
share  of  people  suffering  from  severe 
material  and  social  deprivation  doubled  and 
income inequality is rising. Even though Austria 
managed to reduce the AROPE rate  by 0.8 pps to 
16.9%  in  2024  standing  well  below  the  EU 
average  of  21.0%  some  specific  dimensions  of 
poverty  worsened.  The  share  of  people  suffering 
from  severe  material  and  social  deprivation, 
meaning  those  unable  to  afford  seven  out  of 
fourteen  essential  goods,  more  than  doubled, 

84 

increasing by 1.4 pps to 3.7% (336 000 people) in 
2024 since 2022. This was accompanied by a 40% 
increase  in  the  demand  for  food  banks  between 
2022 to 2023 (253). Also, the share of people with 
an  equivalised  disposable  income  (after  social 
transfers)  below  the  at-risk-of-poverty  (AROP) 
threshold  remained  elevated  and  continuously 
rose from 13.3% in 2019 to 14.9% in 2023. Two 
years  of  recession in the context  of  high inflation 
and elevated energy prices has led to rising levels 
of inequality. While in 2021 the wealthiest income 
quintile  was  earning  4.00  times  more  than  the 
poorest  income  quintile,  the  factor  increased  to 
4.34  in  2024,  nearing  the  EU  average  of  4.66. 
Although below the EU average, 21.5% of persons 
with disabilities were at risk of poverty and social 
exclusion in 2023. 

Women and in particular single parents have 
been  particularly  affected  by  higher  poverty 
levels.  At  18.1%,  women  face  a  2.4  pps  higher 
AROPE  risk  than  men  –  a  gap  that  has  doubled 
since  2015.  This  is  in  part  driven  by  persistently 
high  gender  gaps in  part-time  employment,  lower 
employment  rates  of  women,  and  gender  gaps  in 
pay  amounting  to  18.3%  less  hourly  earnings  for 
women  compared  to  men  (see  Annex  10).  These 
gender  disparities  in  the  labour  market  are  partly 
based on an insufficient availability of and access 
to  affordable  and  high-quality  early  childhood 
education  and  care  (ECEC),  hindering  women  to 
enter the labour market. A lack of adequate ECEC 
affects in particular single parent households, 83% 
of which are women. Since single parents need to 
pay  fixed  costs  (rent,  heating)  on  their  own,  they 
face  significantly  higher  expenses  leading  to  high 
AROPE 
in  2024.  The  stark 
difference  to  a  two-parent  household  can  be 
further observed in relation to the ability to afford 
essential  goods.  While  only  2.7%  of  households 
with children suffer from severe material or social 
deprivation,  11.9%  of  single  households  with 
children  experience  deprivation.  With  every 
additional child, the risk increases disproportionally 
from  3%  with  two  children  to  8%  with  three 
children. While the roll out of more ECEC facilities 
with  longer  opening  hours  has  steadily  increased 
over  the  past  years,  further  efforts  would  be 
beneficial to enable single parents and mothers to 
participate  in  the  labour  market  and  reduce 

levels  of  42.5% 

(253) OTS, Die Tafel Österreich: Erstmals über 1.000 Tonnen 

Lebensmittel gerettet und mehr als 35.000 
armutsbetroffene Menschen versorgt, 2024. 

02468101214161820201520162017201820192020202120222023% of populationATAt-risk-of-poverty-or-social-exclusion rateAt-risk-of-poverty rateSevere material and social deprivationPeople living in low work intensity households 
 
  
 
 
 
poverty  risks.    Supported  through  EU  cohesion 
funds and EUR 15 million under the Recovery and 
Resilience Facility, the measure ‘Early Aid’ supports 
in  particular  socially  disadvantaged  pregnant 
women.  It  aims  to  improve  the  development  and 
children  and  parents 
health  outcomes  of 
throughout the life course, encourage preventative 
approaches  and  secure  children’s 
to 
protection and good health. 

rights 

Graph A11.2: AROPE rates by group 

Source: Eurostat, EU-SILC [ilc_peps01n]. 

to 

reduce 

the  number  of 

One in five children in Austria lives below the 
poverty line. In 2024, 20.9% (EU: 24.2%) or 344 
000  children  were  affected  by  poverty  or 
exclusion.  This  translates  into  a  higher  share  of 
children  being  AROPE  compared  to  the  general 
public (16.9%). The risks are more pronounced for 
children with a migrant background  and for those 
in  precarious  family  situations.  By  2030,  Austria 
aims 
children 
experiencing poverty or social exclusion risks by at 
least 102 000 compared to the 2019 level of 312 
000.  With  currently  344  000  children  AROPE  in 
2023,  Austria  is  however  moving  away  from  its 
target. Children affected by poverty are more likely 
to  lack  adequate  education,  health  provision, 
adequate  housing  and  healthy  nutrition.  To 
mitigate the impact of poverty on children, Austria 
is  implementing  the  European  Child  Guarantee 
under its action plan of December 2023. The 2024 
biennial implementation report shows considerable 
progress  made  in  some  areas,  e.g.  prevention  of 
early  school  leaving  and  promotion  of  healthy 
nutrition. At the same time, stepping up efforts to 
provide  free  full-time  childcare  for  vulnerable 
children  would  be  beneficial.  Reducing  child 
poverty  and  improving  opportunities  for  children, 
from  disadvantaged  backgrounds 
particularly 

boosting 

workforce, 

positively  contributes  to  a  more  educated  and 
economic 
skilled 
competitiveness  in  the  medium  to  long  term. 
Under  the  ESF+  funded  programme  to  fight 
material  deprivation,  the  “Schulstartklar”  project 
supports  students  from  low-income  families  as 
they  begin  the  new  school  year.  Eligible  pupils 
receive  vouchers  worth  EUR  150,  which  can  be 
used  to  purchase  school  supplies  promoting  both 
autonomy  and  providing  targeted  assistance.  The 
programme aims to support around 50 000 pupils 
in need per year. 

People with a migrant background experience 
significantly  higher  poverty  risks.  Although 
figures have decreased since last year, still 42.1% 
of third-country nationals are AROPE in 2024 (EU: 
43.8%).  Taking  the  general  figures  into  account, 
stark  differences  by  citizenship  can  be  observed. 
People not born in Austria are almost three times 
more  likely  to  be  at  risk  of  poverty  compared  to 
Austrian  nationals  (32.6%  vs  11.1%  respectively). 
Having  a  migration  background  therefore  still 
plays  a  crucial  role  in  determining  poverty  risks. 
While limited opportunities in the labour market in 
light  of  institutional,  language  and  skills  barriers 
as  well  as  a  lack  of  recognition  of  qualifications 
contribute  to  elevated  poverty  risks,  many  people 
with  a  migrant  background  also  experience 
discrimination.  Based  on  recent  surveys  by  the 
Fundamental  Rights  Agency  (FRA),  in  2023,  72% 
of surveyed people of African descent felt racially 
discriminated  in  the  five  years  leading  up  to  the 
survey  –  up  from  51%  in  2016.  Moreover,  59% 
felt  discriminated  when  looking  for  work  (vs  34% 
EU (254))  and  66%  of  Muslim  belief  reported  to 
experience discrimination in general (255).  Whereas 
this  has  fundamental  impacts  on  the  individual 
concerned, it may also impact social cohesion and 
economic  prosperity.  In  light  of  an  ageing  society 
and  significant  shortages  of  labour  as  well  as 
skilled  workers  which  potentially  requires  legal 
migration  (see  Annex  10),  continued  efforts  are 
needed to integrate newcomers.  

Poverty  levels  for  older  people  rose,  with 
older  women 
disproportionally 
being 
affected.  The  AROPE  rate  of  people  aged  sixty-
five  years  experienced  a  sharp  increase  in  2023 
nearing  the  EU  average  of  19.7%  and  currenty 
settled on 16.9% in 2024. As such, 278 000 older 

(254) FRA, Being Black in the EU, 2024.   

(255) FRA, Being muslim in the EU, 2024.  

85 

1012141618202224201520162017201820192020202120222023% of populationATChildren (<18y)Working age (18-64)Elderly (65+) 
  
 
(50–59), 

to  0.55 

the  population 

people were AROPE. This might in part be driven by 
a  loss  in  earnings-related  pensions  by  more  than 
5%  in  real  terms  for  2023  within  the  context  of 
high  inflation (256).  At  the  same  time,  the  gross 
median individual pension income (65–74) relative 
to the gross median individual earnings from work 
of 
the  aggregate 
replacement ratio, in Austria dropped from 0.61 in 
2021 
in  2024.  Significant  gender 
disparities  can  also  be  observed  here,  as  gender 
disparities  like  unequal  payment  compound  over 
the  working  life  and  result  in  one  of  highest 
gender  pension  gaps (65-79)  in the  EU  (35.1% in 
2023).  AROPE  level  for  older  women  reached 
20.1%  in  2024,  compared  to  12.9%  for  men.  On 
average women in Austria leave the labour market 
further 
two  or  more  years  before  men, 
contributing  to  their  pension  disparities.  Pension 
top-up  payments  called  “Ausgleichszulage”  are  in 
place  to  reduce  the  AROPE  risk  but  fail  to  lift 
households above the poverty line. As the top-ups 
are significantly lower for a single person than for 
couples,  single  women  are  due  to  lesser  working 
years resulting in lower pensions at a higher risk to 
live in poverty than men.  

Sustained  efforts  are  needed  to  reach  the 
national  poverty  reduction  target  by  2030. 
Austria committed to reduce the number of people 
living  AROPE  by  204  000  in  2030  compared  to 
2019 
levels.  Recent  crises  and  the  related 
unfavourable  recessive  economic  environment 
have  set  back  Austria  in  its  ambition,  leading 
instead  to  an  increase  of  158  000  people  AROPE 
since  2019.  While  the  easing  of  inflationary 
pressures  and  recent  measures  starting  to  bear 
fruit  might  help  Austria  advance  in  its  efforts  to 
reach  the  2030  poverty  target,  particular  policy 
attention  is  warranted  and  further  efforts  might 
be needed. Essential for its success is not only the 
specific targeting and support of vulnerable groups 
but  also  sustaining  and  adapting  Austria’s 
traditionally  strong  welfare  state.  In  2024,  social 
transfers have reduced the risk of poverty or social 
impact  has 
exclusion  by  40.7%.  While 
decreased  over  the  past  years  and 
is  now 
considerably  closer  to  the  EU  average  (from  16.8 
pps  difference  in  2019  to  a  6.3  pps  difference  in 
2023)  social  transfers  have  still  been  able  to 
prevent  more  than  1.3  million  people  from  living 
below the poverty line.   

the 

(256) See 2024 Pension Adequacy report.   

is 

to 

(RRP) 

funds 

fiscal 

leading 

long-term 

investment 

long-term 

important 

to  support 

Coverage  of  long-term  care  needs  is  high, 
living 
which 
standards  of  older  people,  but  the  system 
faces 
sustainability 
concerns.  Older  people  face  a  greater  likelihood 
of illness and in turn increased expenses for long-
term  care  (LTC).  Therefore,  the  ageing  of  the 
population is projected to increase long-term care 
fiscal 
expenditure, 
sustainability concerns (see Annex 1). Reformed in 
2023, the new regulations increased the adequacy 
in  view  of  an  ageing 
of  service  provision 
to 
population,  signalled  ambitious  measures 
increase  attractiveness  of  care  professions  and 
announced  plans  to  alleviate  the  situation  of 
caregiving  relatives.  The  Austrian  recovery  and 
in 
resilience  plan 
community  nurses,  and  primary  care  units  with 
multi-professional  teams.  Nevertheless,  further 
efforts  are  needed  to 
improve  the  working 
conditions  of  live-in  carers  (24h  Betreuung)  who 
are  almost  entirely  self-employed  and  may  lack 
unemployment  insurance,  sickness  benefits  or 
means for quality assurance of working conditions. 
House  prices  have  increased  over  the  last 
decade,  but  recently  stabilised  after  falling 
in  2023.  Overall,  house  prices  have increased  by 
60% since 2015 in nominal terms. In recent years, 
they  decreased  by  2.9%  in  2023  and  decreased 
further in the first half of 2024 before stabilising 
(+0.7%  year-on-year  in  Q3-2024.  The  recent 
moderation follows years of noticeable growth and 
is  driven  by  the  adjustment  to  higher  interest 
rates.  Despite  recent  decreases,  house  prices  are 
estimated to be overvalued by around 15% (as of 
the  end-2024).    Mortgage  rates  increased  from 
1.2% 
impacting 
mortgage credit that shrunk by 2.4% in 2023. The 
adjustment to higher interest rates resulted in the 
number of house transactions declining by 17.0% 
and  26.4%,  while  that  of  building  permits  by 
18.4% and 33.8% in 2022 and 2023 respectively 
(see Annex 17). 

in  2021  to  3.9% 

in  2023, 

Overall  housing  affordability  has  decreased 
over  the  past  decade.  House  price  growth  has 
exceeded  the  pace  of  household  income  over  the 
past decade and the standardised house price-to-
income ratio has increased by 22% since 2015. It 
had  increased  by  34%  between  2015  and  2022 
before  easing  in  2023.  Taking  into  account  the 
cost  of  mortgage  funding,  the  borrowing  capacity 
of  households  worsened  over  the  past  decade  as 
well  since  an  average  household  needs  a 
significantly higher share of its annual income for 

86 

 
 
“Climate-Fitted  Buildings 
initiative,  which 

These measures include the “Clean Heating for All” 
programme,  providing  up  to  100%  funding  for 
boiler replacement in low-income households, and 
for  Vulnerable 
the 
People” 
thermal 
renovations and the installation of climate-friendly 
heating  systems.  Austria  also  promotes  energy 
savings  through  advisory  services  and  appliance 
replacement for low-income households. 

supports 

mortgage repayments.   Having rather large rental 
incomes 
market,  the  ratio  of  new  rents  to 
increased  over  the  last  decade  especially  in  the 
city centres. 

Housing  cost  overburden  affects  few  people 
in  Austria.  In  2024,  only  6.3%  of  the  population 
faced  housing  costs  above  40%  of  their  total 
disposable  household  income  (net  of  housing 
allowances)  compared  to  8.2%  in  the  EU.  It  was 
more prevalent in cities (12%) than in rural areas 
(3%) and five times higher among those below the 
poverty  threshold.  The  housing-cost  overburden 
rate among people experiencing poverty risks was 
35.5%  in  2024,  exceeding  the  EU  average  of 
31.1%. According to the recent EU SILC module on 
renting  difficulties,  11%  of  people  experienced 
housing difficulties, with this share rising to 24.1% 
for  the  AROPE  population.  According  to  the  latest 
for  2022 (257), 
available  administrative  data 
almost 20 000 people are homeless in Austria, of 
which  69%  are  men  and  21%  are  women.  Since 
October  2024,  the  Ministry  of  Social  Affairs' 
Housing First programme has been supporting the 
in 
homeless  by  providing  affordable  housing 
conjunction  with  social  work  care.  In  addition, 
rental costs can be covered from the programme's 
funds  and  needs-based  start-up  support  can  be 
granted.  The  programme’s  budget  is  EUR  20 
million  and  is  expected  to  give  around  2  500 
people  their  own  apartment  over  the  next  two 
years. 

(4% 

impacted  this 

in  2024  compared 

Despite  recent  increases,  energy  poverty 
remains  overall  low  in  Austria.  The  share  of 
the  population  unable  to  keep  their  homes 
adequately  warm  is  significantly  below  the  EU 
average 
to  9.2%). 
However, it is worth noting that the recent energy 
indicator. 
crisis  has  negatively 
Similarly,  5.3%  of  individuals  faced  arrears  on 
utility bills in 2024, a 2.9 pps increase since 2021. 
However,  it  remains  below  the  EU  average  of 
6.9%. Structural issues in dwellings, such as leaks, 
damp, or rot, affected 10.5% of the population in 
2023,  standing  below  the  EU  average  of  15.5% 
but  showing  room  for  improvement.  Austria  is 
through  various 
addressing  energy  poverty 
measures  under  its  National  Energy  and  Climate 
Plan  with  a  focus  on  energy  efficiency  and 
low-income  households. 
targeted  support  for 

(257) Statistik Austria, Kennzahlen zu Lebensbedingungen  

2022, 2023. 

87 

 
 
 
 
ANNEX 12: EDUCATION AND SKILLS 

the 

competitiveness 

Increasing  shortages  of  skilled 
labour, 
stagnant  participation  in  adult  learning  and 
increasingly 
decreasing  basic  skills  are 
threatening 
and 
innovation capacity of the Austrian economy. 
Driven  by  the  transition  to  an 
increasingly 
services-dominated,  digital  and  green  economy, 
the  demand  for  high-skilled  labour  is  rising. 
Austria has a well-developed vocational education 
and  training  (VET)  system  and  high  tertiary 
educational  attainment  rates,  including  in  STEM 
and  ICT.  However,  worsening  basic  skills  among 
students,  notably  driven  by  socio-economic 
inequalities,  and  an  unmet  demand  for 
ICT 
specialists, 
Austria’s 
productivity  and  competitiveness.  To  sustain  fair 
growth and increase innovation capacity, it is thus 
urgent to improve educational outcomes and skills 
formation,  particularly  among  disadvantaged 
groups and those furthest from the labour market 
and  to  further  strengthen  the  development  of 
basic  and  STEM  skills  at  every  stage  from  early 
childhood education and care to adult learning. 

threaten 

impede 

to 

Low  and  stagnant  participation  in  early 
childhood  education  and  care  (ECEC)  and 
wide  inequalities  in  terms  of  quality  affect 
foundational  learning.  In  2023,  enrolment  in 
ECEC  for  children  aged  between  three  and 
compulsory  primary  education  age  was  91.2%. 
This  is  below  the  EU  average  (94.6%)  and  below 
the  EU-level  target  of  96%  by  2030.  The  lowest 
participation rate was in Styria (83.2%), while the 
highest  was  in  Lower  Austria  (97.6%).  As  regions 
and  municipalities  are  responsible  for  providing 
ECEC services in Austria, their quality varies across 
institutions  and  across 
regions.  Participation 
among  children  below  three  years  was  30.2%, 
significantly  lower  than  the  EU  average  (39.3%), 
in  the 
also  hampering  women’s  participation 
labour market (see Annex 10), and vary by region. 
A recent spike by 6.1 pps from 2023 to 2024(258), 
could  signal  a  lasting  increase  while  participation 
has  broadly  stagnated  since  2015  (22.3%)  and 
remains  below  the  national  Barcelona  target  of 
31.9%.  The  scope  for  expanding  ECEC  places  and 
services  is  restricted  by  staff  shortages. A  recent 
study  estimates  that  there  will  be  a  lack  of  at 

(258) The Barcelona target uses survey data from the EU statistics 
on income and living conditions (EU-SILC). These show 
fluctuations in the past. National Statistics Austria based on 
register data shows higher rates 

least  13 700  staff  until  2030 (259).  Students  can 
opt for a career in ECEC at an early age (14 years) 
and  have  the  right  to  access  higher  education 
upon graduation. However, about half of graduates 
never  enter  the  profession  but  pursue  alternative 
career  paths  after  graduation (260).  Austria’s 
recovery  and  resilience  plan  contains  investments 
to  improve  access  to  ECEC.  A  funding  agreement 
between  the  government  and  the  Laender  also 
supports  ECEC  services  until  2026/2027.  While 
aiming to improve quality, it falls short  of setting 
compulsory  quality  standards.  The  2024  financial 
equalisation  law  redistributed  EUR 3.4 billion  to 
regions  with  low  resources,  among  other  things 
enabling  municipalities  to  invest  in  ECEC.  The  law 
also  foresees  EUR 500 million  per  year  for 
creating 50 000 ECEC places by 2030, though this 
sum falls short of the financial needs (261). 

Graph A12.1: Underachievement rates by field, 
PISA 2012, 2018 and 2022 (%) 

Source: OECD, PISA (2022). 

In 
24.9% 

Worsening  basic  skills  among  young  people 
hamper  skills  development  later  in  life, 
productivity  and 
posing  a 
for 
risk 
the  2022  OECD  PISA 
competitiveness. 
survey (262), 
15-year-olds 
underperformed in mathematics, 25.3% in reading 
and  22.7%  in  sciences,  significantly  influenced  by 
their  socio-economic  background.  At  the  same 
time, the share of top-performing students across 
all three subjects remained above the EU average. 
average 
Both 

underachievement 

and 

the 

of 

(259) Löffler, R., et al., Bildungs- und Berufsverläufe von 

Absolventen/inn/en der Bildungsanstalten und Kollegs für 
Elementarpädagogik, 2022. 

(260) Wirth, K, et al., Personalknappheit im Bereich der 

Elementarpädagogik, KDZ, 2023. 

(261) ECO Austria, Kosten des flächendeckenden Ausbaus der 

Kinderbetreuung in Österreich, 2021. 

(262) OECD, Programme for International Student Assessment 

(PISA), 2023. 

88 

05101520253035ATEUATEUATEUMathematicsReadingScience%2012201820222030 EU target 
 
 
  
 
 
 
performance  have  been  worsening  since  2012. 
Almost  half  of  underachieving  children  are  from 
disadvantaged 
backgrounds. 
or  migrant 
Underachievement among disadvantaged students 
has grown steadily in mathematics from 35.1% in 
2012  to  45.1%  in  2022.  Similarly,  45.4%  of 
students  born  abroad  are  under-achievers.  A  high 
and 
increasing  share  of  students  with  a 
migrant (263)  and  often  also  disadvantaged 
background  poses  challenges  (such  as  language 
barriers)  for  teaching,  while  schools  continue  to 
report  a  lack  of  resources  needed  to  deal  with 
these  challenges (264).  Moreover,  the effectiveness 
of  the  language  support  scheme  could  be  further 
improved.  The  share  of  early  school  leavers  is 
8.1%,  below  the  EU  average  (9.3%),  although 
much  higher  among  foreign-born  (15.2%)  than 
native-born students (6.2%). This share is higher in 
cities  (10.4%)  than  in  towns  and  suburbs  (8.6%), 
and  rural  areas  (4.7%).  The  proportion  of  eighth-
grade students who are low-achievers in computer 
and  information  literacy  in  Austria  is  39%,  below 
the  EU  average  (43%),  but  well  above  the  target 
of 15%. 

Austria continues to implement a wide range 
of  reforms  to  improve  the  performance  of 
the  education  system.,  For  example 
the 
pedagogy  package,  new  curricula,  competence 
assessment  and  a  new  system  of  quality 
management  all  have  the  potential  to  improve 
education outcomes. Austria puts specific focus on 
literacy,  which  is  supported  through  a  holistic 
approach as  a cross-curricular topic, accompanied 
by  a  competence  profile  for  teachers  on  literacy. 
for 
Nevertheless,  a  more 
disadvantaged  students  and  schools  would  be 
important. 

targeted  support 

The  ageing  teaching  workforce  means  new 
teachers  must  be  recruited  in  sufficient 
numbers  to  counter  shortages.  While  the 
number  of  6  to  14-year-old  pupils  continues  to 
increase markedly, about a fifth of primary school 
teachers  and  about  a  quarter  of  middle  school 
teachers are over 55 years old and will retire over 
the  next  decade.  High  part-time  rates  (33%) and 
changes  in  the  student  composition  requiring 
additional  staff (265)  also  contribute  to  the  lack  of 
teachers.  Shortages  vary  by  subjects  and  regions. 

While  demand  for  teachers  increased in  2023/24, 
a smaller share of teacher graduates (50.5%) and 
fewer  student  teachers 
(18.8%)  were  hired. 
Meanwhile, the share of lateral entrants increased 
to 8.4% and that of special contracts (persons with 
initial  teacher  education  nor 
neither  finished 
lateral  qualifications)  increased  to  22.3% (266). 
Austria  is  promoting  teaching  through  its  ‘Klasse 
Job’  campaign  and  facilitating  lateral  entry  into 
the  profession.  However,  significant  scope  for 
further measures remains. 

in 

(89.2% 

inequalities, 

Austria  has  a  well-developed  VET  system 
with  extensive  work-based 
learning,  but 
increasing underachievement in mathematics 
among  students  represents  a  challenge. In 
2022, almost 70% of medium-level students were 
enrolled 
in  programmes  with  a  vocational 
orientation.  The  overwhelming  majority  (91.2%  in 
2023) of recent VET graduates gained work-based 
into 
experiences  and  successfully  transferred 
employment 
2023).  However, 
weaknesses in skills development, partially caused 
by  declining  levels  of  basic  skills  and  increasing 
increasingly 
socio-economic 
discourage  companies  from  offering  work-based 
learning (267).  Two  in  three  companies  surveyed 
considered the lack of basic skills in mathematics 
successful 
as 
apprenticeship (268).  To  close  knowledge  gaps,  the 
government  (co-financed  by  ESF+)  added  the 
‘AusbildungsFit’  programme  to  the  apprenticeship 
guarantee.  This  initiative  focuses  on  providing 
basic  skills  and  coaching.  Moreover,  Austria  has 
established  the  program 
‘Lehre  statt  Leere’ 
(coaching for apprentices and training companies). 
The  program  provides  individualised  support  to 
prevent drop-out, address learning gaps and guide 
students 
apprenticeship 
completion.  

the  main  obstacle 

successful 

towards 

to  a 

Austria  has  undertaken  policy  measures  to 
further  develop  the  non-academic  tertiary 
sector  and  make  dual  vocational  training 
more attractive. The 2024 Federal Act on Higher 
Vocational  Education  and  Training 
(Höhere 
Berufliche  Bildung)  supports  the  development  of 
new  tertiary  vocational  qualifications  to  meet  the 
needs  of  the  labour  market  and  incentivises 
professional  development. It is primarily aimed at 

(263) Between 2010-2021 the number of children with migrant 

background has increased by a third to 27.6%. 

(266) Schnider A, (2024) Lehrkräftemangel in Österreich. 
(267) According to ÖGB work-based apprentices decreased by 

(264) See OECD PISA 2022, Table II.B.1.3.3. 
(265) BMBWF, Bildungsbericht 2024. 

13.6% between 2012 and 2022. 

(268) According to a 2019 study of the Federal Ministry of labour. 

89 

 
 
 
heating 

technology, 

workers skilled through vocational training or with 
industry-specific  work  experience.  Moreover,  it  is 
among  others  targeted  at  areas  such  as  energy 
efficiency, 
e-mobility, 
construction  and  renovation,  tourism,  and  metal 
technology. The first qualifications are expected to 
be offered in 2025. This provides a path for higher 
vocational  qualifications  after  an  apprenticeship, 
making  the  apprenticeship  route  more  attractive 
by  creating  vocational  degrees  equivalent  to 
general  and  university-level  education.  Skilled 
workers can earn these degrees while working and 
advance into specialist and leadership roles. 

attainment 

educational 

Tertiary 
is 
increasing,  but  regional  variations  remain 
increasing. In 
and  gender  disparities  are 
2024,  44.1%  of  young  people  (25-34)  held  a 
tertiary  education  degree,  indicating  that  clear 
progress  is  being  made  towards  achieving  the 
45%  EU-level  target.  Although  small  in  relative 
terms,  the  gender  gap  in  tertiary  education  has 
widened  since  2012  and  stood  at  11.9 pps  in 
favour  of  women.  Over  the  last  decade,  tertiary 
attainment  more  than  doubled  (from  22.8%  in 
2012).  The  share  of  tertiary  education  students 
technology, 
(ISCED  5-8) 
engineering  and  mathematics)  disciplines 
is 
29.5%,  slightly  above  the  EU  average  (27.1%). 
Similarly,  the  share  of  students  in  ICT  (6%)  also 
exceeds  the  EU  average  (5.2%).  Austria  aims  to 
further  improve  credit  and  graduate  mobility  and 
to  increase  international  cooperation.  Its  National 
Mobility  and 
Internationalisation  Strategy  for 
Higher Education 2020-2030 supports mobility for 
all  groups  in  higher  education  and  fosters  the 
concept  of  internationalization  of  the  curriculum. 
New 
international 
cooperation by introducing short-term mobility and 
micro-credentials. 

legislation 

facilitates 

in  STEM 

(science, 

teaching, school  or higher education. The Austrian 
2030  Strategy  for  Research,  Technology  and 
Innovation  aims  to  increase  the  share  of  STEM 
graduates by 20% to about 19 500 by 2030, thus 
helping  boost  Austria’s  economic  competitiveness 
and prosperity. 

to 

tackling 

projected 

labour  are 

Bolstering  skills  development  is  crucial  for 
increasing 
competitiveness  and 
skills shortages, as future employment needs 
predominantly  require  high  qualifications.  In 
2023,  a  majority 
(54%)  of  Austrian  firms 
identified  the  lack  of  adequate  skills  within  the 
workforce  as  a  key  constraint  for  business 
activities  and  88%  of  SMEs  struggled  to  find 
employees  with  the  right  skills.  Shortages  of 
increase 
skilled 
considerably  in  the  years  ahead.  According  to  the 
European  Centre 
the  Development  of 
Vocational  Training  (CEDEFOP),  Austria’s  future 
employment needs from 2022 to 2035 will require 
a  workforce  with  high  qualifications.  Meanwhile 
the  demand  for  medium-level  qualifications  will 
decrease,  reflecting  structural  changes  in  the 
Austrian economy in the context of the digital and 
green  transitions (269).  By  2035,  it  is  anticipated 
that  2.45  million  workers  will  be  needed  in 
occupations 
education, 
alongside  70 000  workers  in  roles  necessitating 
low-level  qualifications.  Conversely,  occupations 
requiring  medium 
levels  of  qualification  are 
expected to shrink by 124 000 – see Graph A10.2. 

high-level 

requiring 

for 

Graph A12.2: Future employment needs (2022-
2035) by occupation and education level 

Austria  supports  STEM  programmes  and 
measures  in  the  field  of  education.  In  2022, 
39.8%  of  pupils  enrolled  in  medium-level  VET 
were  enrolled 
in  STEM  fields.  The  country 
encourages  schools  and  universities  to  provide 
STEM in education according to emerging needs of 
the  labour  market.  Austria  has  introduced  the 
action  plan 
increase  young 
people’s  engagement 
in  STEM  as  part  of 
promoting  STEM  among  the  public.  Another  focus 
is  addressing  the  shortage  of  skilled  workers  in 
these  areas.  The  action  plan  combines  existing 
STEM initiatives with new measures and addresses 
the  entire  educational  chain  from  kindergarten  to 

‘MI(N)Tmachen’ to 

90 

Source: CEDEFOP, Skills forecast 2023 - Austria. 

Basic  and  digital  skills  are  widespread,  but 
those  with  lower  qualifications  are  falling 
behind.  According  to  the  OECD  Survey  of  Adult 

(269) CEDEFOP, Skills forecast 2023 – Austria. 

-200000-1000000100000200000300000400000500000600000700000AssociateprofessionalsClerksElementaryworkersFarm andrelatedworkersManagersOperatorsandassemblersProfessionalsService andsales workersTradesworkersLowMediumHigh 
  
 
in 

in 

foundational 

(27%).  These 

Skills (2022-23), Austrian adults performed above 
the  OECD  average  in  numeracy  and  adaptive 
problem  solving,  while  they  ranked  below  the 
average 
literacy.  Literacy  also  decreased 
compared  to  the  previous  period.  Almost  one  in 
three  adults  demonstrated  proficiency  only  at 
Level 1 or below in literacy (29%), and around one 
in  four  struggled  in  numeracy  (23%)  and  with 
adaptive  problem  solving 
low-
performing adults are limited  to basic tasks, such 
as understanding short texts or performing simple 
mathematical  calculations,  highlighting  significant 
skills.  Austria  also 
gaps 
experienced  a  significant  widening 
the 
proficiency  gap  between  adults  with  less  than 
upper secondary education and those with tertiary 
education.  This  points  to  increasing  challenges  in 
basic  skills  among  adults  and  calls  for  policy 
attention.  At  the  same  time,  Austria  is  above  the 
EU  average 
in  digital  skills.  72.23%  of  the 
population (25-64) have at least basic digital skills 
in 2023, compared to the EU  average of  64.74%. 
However, basic digital skills are low among people 
who  have  lower  qualifications  (37.2%)  and  the 
country  faces  challenges  regarding  advanced 
digital  skills.  Only  32.0%  of  the  population  have 
above-basic  digital  skills,  placing  Austria  behind 
the EU’s front-runners. 

in 

Austria’s  lack  of  ICT  experts  is  negatively 
impacting  competitiveness.  The  5.3%  share  of 
ICT  specialists  in  employment  exceeds  the  EU 
average  of  4.8%,  but  recruitment  difficulties 
persist.  The  Austrian  Federal  Economic  Chamber 
claims  a  shortfall  of  28 000 ICT experts  in  the 
labour  market (270).  Women 
remain  under-
represented,  with  only  19.5%  of  ICT  specialists 
being  female  (EU  average:  19.4%).  As  regards 
basic digital skills, Austria has set one of the most 
ambitious  national  targets  in  the  EU,  aiming  to 
have 100% of the population aged 16-74 with at 
least  basic  digital  skills  by  2030,  well  above  the 
EU  target  of  80%.  The  digital  literacy  campaign 
‘Digital überall’ run by adult education institutions 
aims  to  raise  the  level  of  digital  skills.  However, 
given  the  current  rate  of  progress,  achieving  full 
digital  inclusion  by  2030  will  require  sustained 
efforts  and  targeted  policy  measures.  Current 
skills  shortages  in  the  IT sector  also  constitute  a 
particular  threat  to  the  competitiveness  and 
innovation of Austria’s economy and developments 
in the highly competitive AI sector. 

(270) See WKO, Branchennews Februar 2024.  

91 

Adult  learning  is  stagnating.  While  a  majority 
of the working-age (25-64) population took part in 
training (52.2%) in 2022 (EU 39.5%), participation 
in  adult  learning  decreased  by  3.1 pps  compared 
to  2016  and  remained  well  below  the  2030 
national  target  of  62.0%.  A  strong  adult  learning 
system is key for the labour market integration of 
some groups with lower labour market attainment 
by  providing  them  with  the  necessary  skills.  The 
low  and  decreasing participation  rates  among  the 
low-qualified  continues  to  pose  a  particularly 
significant  challenge,  considering  the  widespread 
labour  shortages.  In  2022,  only  21.4%  of  those 
with  at  most 
secondary  education 
participated  in  training  (down  from  26.9%  in 
2016).  This  is  particularly  problematic,  as  they 
job 
face  higher  risks  of  unemployment  and 
reductions due to the digital and green transitions 
(see  Annex 10).  Participation  is  also  low  among 
persons outside the labour force (34.5%) and older 
workers (55-64) (39.8%). 

lower 

There is an increasing need for upskilling and 
reskilling  to  address  shortages  of  skilled 
labour.  Providing  tailored  upskilling  and  reskilling 
to  these  groups  is  key  for  their  finding  lasting 
work.  In  this  regard,  the  former  ‘Bildungskarenz’ 
(unpaid educational leave), which is supplemented 
with  a  financial  allowance,  remains  an  important 
pathway  and  incentivises  life-long  learning.  The 
programme  ‘Level  Up–Erwachsenenbildung’  helps 
participants  acquire  basic  digital  skills  as  well  as 
basic  writing,  reading  and  mathematical  skills. 
Austria  experiences  challenges  in  reaching  the 
low-qualified and motivating them to participate in 
training. Fully  using  the  work  experience  of  older 
workers leaving the labour market is essential for 
the green transition (271). General funding for adult 
education  lags  behind  the  needs  in  the  labour 
market (272).  However,  the  share  of  the  education 
budget  spent  on  adult  education  has  decreased 
compared to previous years. 

The broader need for upskilling and reskilling 
the  current  workforce  includes  developing 
green  skills  crucial  for  Austria’s  green 
transition. In 2024, Austria had labour shortages 
for several occupations (including civil engineering 
technicians,  roofers,  and  air  conditioning  and 
refrigeration  mechanics)  requiring  specific  skills 

(271) Majcen, M. (2024). AMS-New Skills Talks. In: AMS Info 653 
(272) See Evers, J. (2024). Die Volkshochschulen nach den 

Nationalratswahlen 2024, forthcoming. 

 
 
 
for 

education 

education 

environmental 

related to the green transition. In this context, new 
primary  and  secondary  school  curricula  including 
environmental 
sustainable 
development were introduced in 2023/2024. They 
integrated 
for 
sustainable  development  as  one  of  13  cross-
curricular  themes.  Moreover,  the  initiative  ‘Mehr 
Grips’  also  supports  the  provision  of  skills  to 
labour  market  needs  for  the  green 
address 
installation  and  energy 
(such  as 
transition 
technology,  building 
renovation)  and  second 
careers  through  further  training.  The  updated  list 
of  shortage  occupations  now  includes  green  jobs 
in the mobility sector. 

92 

 
ANNEX 13: SOCIAL SCOREBOARD 

Table A13.1:Social Scoreboard for Austria 

(1) Update of 5 May 2025. Members States are categorised based on the Social Scoreboard according to a methodology agreed 
with the EMCO and SPC Committees. Please consult the Annex of the Joint Employment Report 2025 for details on the 
methodology (https://employment-social-affairs.ec.europa.eu/joint-employment-report-2025-0). 
Source: Eurostat 

93 

52,28,164,79,26,94,3477,45,21,198,516,920,940,720,76,330,21,0Critical situationTo watchWeak but improvingGood but to monitorOn averageAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Equal opportunities and access to the labour marketSocial Scoreboard for AustriaBest performersBetter than averageEarly leavers from education and training(% of  the population aged 18-24, 2024)Young people not in employment, education or training(% of the population aged 15-29, 2024)Gender employment gap(percentage points, population aged 20-64, 2024)Income quintile ratio (S80/S20, 2024)Dynamic labour markets and fair working conditionsSocial protection and inclusionShare of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2024)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2024)Self-reported unmet need for medical care (% of the population aged 16+, 2024)Disability employment gap (percentage points, population aged 20-64, 2024)Housing cost overburden (% of the total population, 2024)At risk of poverty or social exclusion (AROPE) rate (% of the total population, 2024)Employment rate(% of the population aged 20-64, 2024)Unemployment rate(% of the active population aged 15-74, 2024)Long term unemployment(% of the active population aged 15-74, 2024)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2023)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2024) 
 
 
 
  
 
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

health 

system 

Austria’s 
performs 
comparatively well, with relatively low rates 
of  treatable  and  preventable  mortality. 
However,  Austria  faces  challenges  with 
the 
sustainability  of  its  health  system  and  shortages 
of healthcare workers. These need to be addressed 
if  the  country  is  to  ensure  the  health  of  its 
population  and  social  fairness,  while  boosting  the 
competitiveness of its economy.  

Life  expectancy  at  birth  in  Austria  was 
slightly higher than the EU average in 2023, 
but remained slightly below its pre-COVID-19 
level.  This  also  marks  a  relative  drop  in  life 
expectancy  since  2019,  when  Austria’s 
life 
expectancy  was  more  than  eight  months  higher 
than  the  EU  average.  The  country  has  a  clear 
gender gap, with women expected to live 4.7 years 
longer than men. That said, they can only expect to 
live  around  0.7  years  longer  than  men  in  good 
in 
health.  Austria 
avoiding  deaths  from  treatable  causes.  In  2022, 
diseases of the circulatory system (‘cardiovascular 
diseases’)  and  cancer  were  the  leading  causes  of 
death, followed by COVID-19. The cancer mortality 
rate  was  lower  than  the  EU  average,  while  the 
mortality  rate  from  cardiovascular  diseases  was 
higher than the EU average.  

fares  comparatively  well 

Graph A14.1: Life expectancy at birth, years 

healthcare. That said, the number of hospital beds 
in  Austria  has  been  declining  in  recent  years. 
However,  the  occupancy  rate  of  acute  care  beds 
remains low (67.5%) suggesting an inefficient use 
of  resources.  Efficiency  gains  through  structural 
reforms  are  particularly  important  in  light  of 
Austria’s  country-specific 
recommendation  of 
2024  to  improve  the  fiscal  sustainability  of  its 
health system. This is because, due to ageing, the 
for 
projected 
healthcare 
fiscal 
sustainability (see Annex 1).  

in  public 
concerns 

spending 
about 

increase 
raises 

A  health  reform  package  for  2024-2028 
aims,  among  other  things,  to  deliver  care  in 
more  cost-effective  ways.  With  a  vision  of 
‘digital  before  outpatient  before  inpatient  care’, 
structural  reforms  will  expand  day  clinics  in 
hospitals  and  specialised  outpatient  hospital 
departments,  while  strengthening primary  care  by 
setting  up  133  primary  healthcare  units  by  2025 
and  creating  hundreds  of  additional  positions  for 
contracted  physicians  in  ambulatory  and  primary 
care.  The  roll-out  of  multi-professional  primary 
healthcare units across the country is supported by 
Austria’s recovery and resilience plan (RRP), which 
also 
to  make  primary 
healthcare more attractive to general practitioners 
and  other  health  and  social  care  professionals. 
Moreover,  Austria  participates  in  the  EU4Health-
funded  joint  action  CIRCE-JA  (273)  aimed  at  the 
transfer of good practices in primary care between 
EU countries. 

includes  measures 

Graph A14.2: Treatable mortality 

Source: Eurostat (demo_mlexpec) 

Austria’s  health  system  is  strongly  hospital-
centred,  which  poses  risks  to  its  fiscal 
sustainability  and 
the  accessibility  of 
healthcare. 
In  2022,  health  spending  per 
inhabitant  in  Austria  (adjusted  for  differences  in 
purchasing  power)  was  among  the  highest  in  the 
EU,  with  the  largest  share  (higher  than  the  EU 
average)  going  towards 
inpatient  care.  This, 
together  with  the  high  number  of  hospital  beds 
(600  per  100 000  population  in  2022,  much 
higher  than  the  EU  average), 
illustrates  the 
country’s  strongly  hospital-centred  model  of 

94 

Age-standardised death rate (mortality that could be 
avoided through optimal quality healthcare) 
Source: Eurostat (hlth_cd_apr) 

Austria  places  significant  focus  on  disease 
prevention.  The  share  of  spending  directed  at 

(273) Joint Action CIRCE-JA . 

82.081.381.381.481.981.380.480.180.681.420192020202120222023AustriaEU75.273.270.471.269.291.389.291.793.389.720182019202020212022per 100 000 populationAustriaEU 
 
      
      
 
 
 
Table A14.1:Key health indicators 

*The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used based on 2022 (or latest 2021) data except for Luxembourg (2017). Doctors’ density data refer to practising 
doctors in all countries except Greece, Portugal (licensed to practise) and Slovakia (professionally active). Density of nurses: data 
refer to practising nurses (EU recognised qualification) in most countries except France and Slovakia (professionally active) and 
Greece (hospital only). **‘Available hospital beds’ covers somatic care, not psychiatric care. ***The EU median is used for patents. 
Source:  Eurostat database; European Patent Office; ****European Centre for Disease Prevention and Control (ECDC) for 2023. 

prevention  stood at 7.4% of  Austria’s total  health 
expenditure in 2022, well above the EU average of 
5.5%.  While  the  rate  of  preventable  mortality  is 
lower  than  the  EU  average,  around  one  third  of 
deaths are linked to behavioural  risk factors, with 
Austria having among the highest levels of alcohol 
consumption and the highest smoking rates in the 
EU. Measures to strengthen health promotion and 
disease  prevention  will  receive  more  funding  as 
part  of  the  2024-2028  health  reform  package. 
The  RRP  also  supports  the  nationwide  roll-out  of 
intervention  programmes  for 
early  childhood 
pregnant women and young parents.  

Shortages of healthcare workers are a cause 
for concern in Austria, as they could limit the 
availability  of  healthcare.  The  density  of 
doctors  and  nurses  is  above  the  EU  average. 
However, as mentioned in the 2024 country report 
for  Austria  (274),  debates  are  ongoing  about  the 
shortage  of  doctors 
in  certain  regions  and 
specialties  (for  example,  general  practitioners). 
Furthermore,  the  few  doctors  that  take  on  new 
patients  often  do  not  have 
reimbursement 
contracts  with  the  state  health  insurance  system. 
Moreover, around 34% of physicians are aged 55 
and  over,  and  less  than  20%  are  aged  below  35, 
raising  concerns  about  the  long-term  accessibility 
of  health  services.  Amid  nationwide  shortages, 
hospitals  are  competing  to  attract  doctors  by 
offering  higher  salaries.  Lower  Austria  recently 
announced  an  increase  in  starting  salaries  for 
young  doctors.  Similar  measures  have  been 
introduced  by  other  regions  such  as  Vienna, 
Burgenland and Styria. In an effort to increase the 

attractiveness  of  physician  placements  in  rural 
areas,  the  Austrian  health  insurance  fund  (ÖGK) 
launched  a  scheme  of  scholarships  for  medical 
students  who  commit  themselves  to  work  as 
in  general  medicine, 
contracted  physicians 
paediatrics,  gynaecology  and  psychiatry 
in 
underserved  regions  for  at  least  five  years  after 
completing their training.  

Austria’s  health  system  contributes 
to 
innovation and industrial development in the 
EU medical sector, but there is still room for 
improvement. Austria is among the EU countries 
reporting  substantial  public  spending  on  health 
research and development. This is reflected in the 
high  number  of  European  patents  granted:  96  in 
2023  in  the  combined  areas  of  pharmaceuticals, 
biotechnologies  and  medical  technologies  (vs  an 
EU-level median of 29) (275). However, Austria lags 
behind several EU countries on clinical trial activity 
(276). 

Austria’s  uptake  of  e-health  and  overall 
health  system  digitalisation  is  rather  slow. 
Despite  the  above  average  overall  technical 
deployment of electronic health records in Austria 
is 
(see  Annex  6),  their  use  by  the  public 
comparatively  low.  Furthermore,  the  share  of 
people  using  online  health  services  (excluding 
phone) 
is 
among  the  lowest  in  the  EU.  The  2024-2028 
healthcare  reform  package  aims  to  boost  the 
digital  transformation  of  the  health  sector  in 

in-person  consultations 

instead  of 

(274) European Semester 2024 Country Report - Austria.  

environment, p. 9. 

(275) European Patent Office, Data to download | epo.org. 
(276) EMA (2024), Monitoring the European clinical trials 

95 

20192020202120222023EU average* (latest year) Cancer mortality per 100 000 population229.6230.5224.7226.1n.a.234.7 (2022)Mortality due to circulatory diseases per 100 000 population 362.9 361.0 343.3 346.6n.a.336.4 (2022)Current expenditure on health, purchasing power standards, per capita3 9664 0664 7374 751n.a.3 684.6 (2022)Public share of health expenditure, % of current health expenditure 75.1 76.9 78.2 77.6 77.281.3 (2022)Spending on prevention, % of current health expenditure 2.13.210.47.4n.a.5.5 (2022)Available hospital beds per 100 000 population** 650 636 620 600n.a.444 (2022)Doctors per 1 000 population*5.35.35.45.4n.a.4.2 (2022)*Nurses per 1 000 population* 10.3 10.3 10.7 10.7n.a.7.6 (2022)*Mortality at working age (20-64 years), % of total mortality14.113.414.113.613.714.3 (2023)Number of patents (pharma / biotech / medical technology)13712695809629 (2023)***Total consumption of antibacterials for systemic use,                    daily defined dose per 1 000 inhabitants****11.68.88.810.511.320.0 (2023) 
 
 
 
      
 
 
(for  example, 

Austria  by:  (i)  establishing  a  primary  entry  point 
into  the  health  system  via  expanded  digital 
services 
(ii) 
making  it  obligatory  for  all  ambulatory  care 
providers to use electronic health records; and (iii) 
setting  up  a  platform  for  the  secondary  use  of 
health data.  

teleconsultations); 

Austria  participates  in  joint  actions  and  benefits 
from direct grants under EU4Health, which aim to 
improve  the  semantic  interoperability  of  health 
data  and  facilitate  the  implementation  of  the 
European Health Data Space. In addition, Austria’s 
RRP includes investments to develop an ‘electronic 
mother  child  pass  platform’,  which  consists  of 
electronic  documentation  and  a  communication 
platform  for  simplified  access  to  test  results  for 
healthcare practitioners and mothers, in particular 
from socially disadvantaged families. 

96 

 
 
HORIZONTAL 
ANNEX 15: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses  Austria’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  dimensions  of  competitiveness, 
sustainability,  social  fairness.  The  17  SDGs 
and  their  related  indicators  provide  a  policy 
framework  under  the  UN’s  2030  Agenda  for 
Sustainable  Development.  The  aim  is  to  end  all 
forms  of  poverty,  fight  inequalities  and  tackle 
climate change and the environmental crisis, while 
ensuring that no one is left behind. The EU and its 
Member  States  are  committed  to  this  historic 
global  framework  agreement  and  to  playing  an 
active  role  in  maximising  progress  on  the  SDGs. 
The graph below is based on the EU SDG indicator 
set developed to monitor progress on the SDGs in 
the EU. 

on  most  SDGs 

Austria  performs  well  and  continues  to 
to 
improve 
competitiveness (SDGs 8 and 9). It is likewise 
improving  on  productivity-related  indicators 
that  form  part  of  quality  education  (SDG 4). 
Compared  to  the  EU  average  (13.3%),  Austria 

related 

performs  relatively  well  in  adult  participation  in 
learning,  with  17.6%  of  adults  in  2024,  up  from 
14.7%  in  2019.  Austria  also  performs  well  on 
most  indicators  within  SDG 8  (Decent  work  and 
economic growth) and SDG 9 (Industry, innovation 
and  infrastructure).  With  3.29%  of  GDP  allocated 
to  R&D  in  2023,  improved  from  3.11%  in  2018, 
Austria  has  one  of  the  highest  levels  of  R&D 
spending  in  the  EU.  The  employment  rate  rose 
from  76.8%  in  2018  to  77.4%  in  2024,  better 
than  the  EU  average  of  75.8%.  Austria’s  recovery 
(RRP)  contains  several 
and 
measures  to  enable  digitalisation  and  make 
significant  investments  in  strategic  research  and 
innovation, which will help ensure further progress 
on these SDGs. 

resilience  plan 

Austria is improving on most SDGs related to 
sustainability  (SDGs 2,  6,  7,  9,  11,  12,  13), 
but it needs to catch up with the EU average 
on  several  of  these  (SDGs 2,  7  and  12. 
Historically, Austria has performed very well on the 
share of renewable energy in its gross final energy 

Graph A15.1: Progress towards the SDGs in Austria 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings – Sustainable development 
indicators - Eurostat (europa.eu). A high status does not mean that a country is close to reaching a specific SDG, but signals that it 
is doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 
five years. The calculation does not take into account any target values, as most EU policy targets are only valid for the aggregate 
EU level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source:  Eurostat, latest update of 28 April 2025. Data refer mainly to the period 2018-2023 or 2019-2024. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

97 

 
 
 
 
 
 
 
to 

improve 

targeted  measures 

peace,  justice  and  strong  institutions  (SDG 16), 
showing  that  there  is  a  stable  and  predictable 
environment  for  doing  business.  The  RRP  includes 
several 
the 
sustainability  of  the  pension  system  and  the 
is 
quality  of  public  spending,  and  the  plan 
therefore  expected  to  also  contribute  to  some 
extent  to  Austria’s 
long-term  macroeconomic 
stability.  On  partnerships  for  the  goals  (SDG  17), 
Austria  showed  progress,  but  it  is  still  performing 
poorly compared to the EU average, particularly on 
official  development  assistance.  The  share  of 
households  with  a  high-speed  internet  connection 
also  still  lags  the  EU  average,  but  improved  at  a 
rapid pace from 13.8% in 2019 to 67.6% in 2024. 

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other annexes. 

to 

further  contribute 

consumption.  It  was  able  to  further  increase  this 
share from 33.8% in 2018 to 40.8% in 2024, well 
above  the  EU  average.  Various  measures  in  the 
RRP  aim 
to  general 
greenhouse gas emission savings and are likely to 
support  Austria’s  environmental  sustainability. 
These measures include the eco-social tax reform, 
the Renewables Expansion Law and investment in 
renewables,  energy  efficiency, 
zero-emission 
mobility and biodiversity. The Biodiversity Fund as 
well as the biodiversity strategy published as part 
of the Austrian RRP will also help address SDG 15 
(Life on Land) aims. 

The  picture  on  SDGs  related  to  social 
fairness  (SDGs 1,  3,  4,  5,  7,  8,  10)  is  more 
mixed  than  previously.  Austria  is  moving 
away  from  SDG  3  (Good  health  and  well-
being) on several indicators, while it needs to 
catch  up  to  the  EU  average  on  SDGs  3,  5,  7 
and 10. It performs well on SDGs 1, 4 and 8. 
The  share  of people  with good  or  very  good  self-
perceived  health  decreased  at  a  faster  pace  than 
the EU average (SDG 3; 69.3% in 2023 compared 
to  71.7%  in  2018).  Austria  again  reversed  course 
on  the  in-work  at-risk-of-poverty  rate  to  register 
an improvement (SDG 1; 7.6% in 2022, compared 
to 8% in 2018), and the long-term unemployment 
rate is improving (SDG 8; 1.1% in 2024 compared 
to  1.4%  in  2018  while  the  EU  average  decreased 
from 2.7% to 1.9%). On SDG 4 (Quality education), 
Austria  increased  the  participation  rate  in  early 
childhood  education  for  children  aged  three  and 
over  to  91.2% in  2023  and  continued  to  increase 
the  share  of  adults  with  a  tertiary  qualification 
from 41.6% in 2019 to 44.1% in 2024. However, 
the  share  of  early  leavers  from  education  and 
training  increased  from  7.8%  in  2019  to  8.1%  in 
2024,  illustrating  a  need  for  improvement  in 
in  education, 
ensuring  equal  opportunities 
particularly for disadvantaged young people. Ways 
to address this are supported by several measures 
in  the  Austrian  RRP  targeted  at:  (i)  access  to 
(ii) 
training  and  upskilling;  and 
education, 
assistance to socially disadvantaged women. 

Overall,  Austria  performs  well  on  SDGs 
related  to  macroeconomic  stability  (SDGs 8 
and  16),  while  it  needs  to  catch  up  on 
partnerships  for  the  goals  (SDG 17).  Austria 
performs well on SDG 8 and managed to increase 
its investment share of GDP from 24.3% in 2018 
to 24.9% in 2023 against the trend in the EU (EU 
average:  21.7%  in  2024).  In  addition,  Austria 
achieves  high  scores  on  indicators  measuring 

98 

 
 
 
ANNEX 16: CSR PROGRESS AND EU FUNDS IMPLEMENTATION 

(280).  The  contribution  of 

these 
2024  GDP 
is 
instruments  to  different  policy  objectives 
outlined 
in  Graphs  A16.1  and  A16.2.  This 
substantial  support  comes  on  top  of  financing 
provided 
the  2014-2020 
multiannual  financial  framework,  which  financed 
projects  until  2023  and  has  had  significant 
benefits  for  the  economy  and  Austrian  society.  
Project  selection  under  the  2021-2027  cohesion 
policy programmes has accelerated. 

to  Austria  under 

The  Austrian  RRP  contains  34  investments 
and  29  reforms  to  stimulate  sustainable 
growth  and  contribute  to  implementing  the 
twin  transitions.  A  year  before  the  end  of  the 
RRF  timespan,  implementation  is  delayed,  with 
30%  of  funds  disbursed.  At  present,  Austria  has 
fulfilled  25%  of  the  milestones  and  targets  in  its 
RRP (281). Efforts are needed to ensure completion 
of all RRP measures by 31 August 2026.  

the 

Austria  also  receives  funding  from  several 
other  EU  instruments,  including  those  listed  in 
Table  A16.1.  Most  notably, 
common 
agricultural  policy  (CAP)  provides  Austria  with  an 
EU  contribution  of  EUR 6.1  billion  under  the  CAP 
strategic plan 2023-2027(282). A further EUR 217.3 
million  are  available  under  the  Asylum,  Migration 
and  Integration  Fund  (AMIF),  together  with  the 
border  management  and  visa  instrument  (BMVI) 
and internal security funds. Operations amounting 
to EUR 497.3 million (283) have been signed under 
the 
instrument  backed  by  the  EU 
guarantee,  improving  access  to  financing  for 
riskier operations in Austria. 

InvestEU 

recommendations 

Austria faces structural challenges in a wide 
range  of  policy  areas,  as  identified  in  the 
country-specific 
(CSRs) 
addressed  to  the  country  as  part  of  the 
European Semester. They suggest, among other 
things, to strengthening the budgetary  framework 
and fiscal governance, improving the tax mix, and 
securing  sustainability  of  the  healthcare,  long-
term  care  and  pension  systems.  In  addition  they  
refer 
innovation,  startups  and 
scaleups,  advancing  digitalisation  of  businesses, 
facilitating decarbonisation, renewable energy and 
energy  affordability,  increasing  energy  efficiency, 
reducing  regulatory  and  administrative  burden, 
strengthening  business  environment,  improving 
access  to  finance  for  businesses,  enhancing  skills 
by  strengthening  training  and  education  and 
implementing active labour market policies,. 

fostering 

to 

The Commission has assessed the 2019-2024 
CSRs  considering  the  policy  action  taken  by 
Austria  to  date  and  the  commitments  in  its 
recovery  and  resilience  plan  (RRP).  At  this 
stage,  Austria  has  made  at  least  ‘some  progress’ 
on 88% of the CSRs (277), and ‘limited progress’ on 
10% (Table A16.2). 

to 

by 

competitiveness, 

EU funding instruments provide considerable 
resources 
supporting 
Austria 
investments  and  structural  reforms  to 
increase 
environmental 
sustainability  and  social  fairness,  while 
helping  to  address  challenges  identified  in 
the  CSRs.  In  addition  to  the  EUR 4.2  billion 
funding  from  the  Recovery  and  Resilience  Facility 
(RRF) in 2021-2026, EU cohesion policy funds (278) 
are  providing  EUR 1  billion  to  Austria  (amounting 
to  nearly  EUR 3  billion  with  national  co-financing) 
regional 
for 
competitiveness  and  growth.  Support  from  these 
instruments  combined  represents  around  1.1%  of 

2021-2027 

boost 

(279) 

to 

(277) 6% of the 2019-2024 CSRs have been fully implemented, 
10% substantially implemented, and some progress has 
been made on 72%. 

(278) In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. The information on cohesion 
policy included in this annex is based on adopted 
programmes with the cut-off date of 5 May 2025. 

(279) European territorial cooperation (ETC) programmes are 

excluded from the figure. 

(280) RRF funding includes both grants and loans, where 

applicable. The EU average is calculated for cohesion policy 
funds excluding ETC programmes. GDP figures are based on 
Eurostat data for 2024. 

(281) As of mid-May 2025, Austria has submitted 2 payments 

requests, the last one being under assessment. 

(282) An overview of Austria’s formally approved strategy to 

implement the EU’s common agricultural policy nationally 
can be found at: https://agriculture.ec.europa.eu/cap-my-
country/cap-strategic-plans/austria_en. 

(283) Data reflect the situation on 31.12.2024. 

99 

 
 
 
 
 
 
Graph A16.1: Distribution of RRF funding in Austria 
by policy field 

school  leaving,  promoting  vocational  education, 
and  training  and  lifelong  learning  in  Austria.  The 
Just  Transition  Fund  (JTF)  provides  an  additional 
almost  EUR 60  million  to  support  upskilling  and 
reskilling.  Joint  efforts  are  being  made  under  the 
ESF+  and  the  JTF  to  help  companies  to  better 
respond  to  the  growing  shortage  of  skilled 
workers,  to  foster  older  workers’  participation  in 
the  labour  market,  and  to  help  young  people 
remain  in  education  and  successfully  transition 
from school to training and employment. 

(1) Each RRP measure helps achieve the aims of two of the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle, while the secondary contribution is shown 
in the inner circle. Each circle represents 100% of the RRF 
funds. Therefore, the total contribution to all pillars displayed 
on this chart amounts to 200% of the RRF funds allocated. 
Source: European Commission 

Graph A16.2: Distribution of cohesion policy 
funding across policy objectives in Austria 

Source: European Commission 

It 

(SMEs). 

Cohesion  policy  funds  aim  to  increase  the 
productivity and competitiveness of Austrian 
firms and improve the business environment. 
The  European  Regional  Development  Fund  (ERDF) 
is used to support innovative investments in small 
and  medium-sized  enterprises 
is 
expected  to  support  approximately  1 800  firms, 
leverage  an  estimated  EUR 550  million  in  private 
investment  and  create  more  than  1 400  jobs.  To 
increase  the  efficiency  and  economic  exploitation 
of scientific performance and to boost productivity, 
the  ERDF  provides  targeted  funding  for  research 
and  innovation.  Austria  is  making  use  of  the 
Strategic Technologies for Europe Platform (STEP) 
to  strengthen  its  competitiveness,  by  supporting 
productive investments in critical technologies with 
the  Just  Transition  Fund.  In  addition,  almost 
EUR 220  million  from  the  European  Social  Fund 
Plus  (ESF+)  are  being  invested  in  reducing  early 

the 

are 

expansion 

contributing 

of  alternative 

in  Austria,  for 

to 
funds 
Other 
competitiveness 
instance 
through  open  calls.  The  Connecting  Europe 
Facility  has  financed  strategic  investments  for 
in  rail  infrastructure  (e.g.  enhancing 
instance 
cross-border  connectivity  between  Austria  and 
Italy), 
fuel 
infrastructure  and  the  modernisation  of  Austria's 
inland  waterway  sector;  and  the  development  of 
key  energy  infrastructure  projects,  including  the 
diversification  of  natural  gas  sources  and  routes. 
Horizon  Europe  has  supported  research  and 
to 
innovation, 
scaling  up  innovations,  with  Climate,  Energy  and 
Mobility and the European Research Council as top 
priority  areas.    In  2024,  the  TSI  has  supported 
Austria  to  strengthen  its  capacity  to  model  the 
macroeconomic  effects  of  green  policies  and 
for 
investments; 
the 
sustainable 
protection  facility  for  child  victims  of  trafficking; 
and  improving  compliance  and  transparency  of 
public  procurement  procedures.  In  multiple  areas, 
technical  support  has  also  been  provided  at 
regional level and as part of cross-border projects. 

improving  policy  coherence 
development; 

from  scientific  breakthroughs 

strengthen 

to 

the 

Austria’s  RRP  also  contains  ambitious 
business 
improve 
measures 
environment  and  competitiveness.  As  part  of 
the  measures  covered  by  payment  requests 
submitted over the past year, measures are being 
the 
implemented 
administrative burden for company handovers and 
making  the  business  environment  more  attractive 
for  start-ups,  as  well  measures  to  support  green 
and digital investments in SMEs.  

the  areas  of  easing 

in 

EU  funds  are  playing  a  significant  role  in 
promoting  environmental  sustainability  and 
the  green  transition  in  Austria  during  the 
current  seven-year  EU  budget  (multiannual 
financial framework). Cohesion policy funds are 
contributing to a faster green transition in Austria. 

100 

Green transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generationSmarter EuropeGreener EuropeConnected EuropeSocial EuropeEurope closer to citizensJTF specific objective 
   
 
   
strengthen  the  protection  of  vulnerable  groups 
(e.g.,  enhances  early  detection  of  human 
trafficking victims). 

Austria’s  RRP  contains  several  reforms  and 
investments  related  to  fairness  and  social 
policies.  As  part  of  the  measures  covered  by 
payment  request  submitted  over  the  past  year, 
measures  are  being  implemented  in  the  areas  of 
healthcare and education. 

Approximatively  one  quarter  of  ERDF  funding  is 
dedicated to increasing energy efficiency in around 
1 500 businesses, as well as infrastructure at local 
authority  level.  EUR 76  million  from  the  JTF  is 
being  used  to  promote  diversification  towards 
innovation-driven  economic 
sustainable  and 
activities  and  to  support  research  and  innovation 
projects  on  climate  transition  in  parts  of  the 
Niederösterreich,  Kärnten,  Oberösterreich  and 
Steiermark  regions.  As  for  the  CAP  strategic  plan, 
Austria  uses  nearly  60%  of  its  rural  development 
budget  (EUR 1 521  million)  for  environmental 
objectives, and a further EUR 500 million for eco-
schemes. 
and 
environmental  and  climate-related  measures 
focus on biodiversity, animal welfare, and soil and 
onwards, 
From 
water 
agroforestry  strips  will  be  supported  as  well. 
Additionally,  the  share  of  biodiversity-enhancing 
landscape  features  such  as  (fruit)  orchard  trees, 
bushes, hedges, flower strips and bee pastures will 
increase so that by 2030 they cover over 10% of 
agricultural land in the country. 

eco-schemes 

protection. 

Austria’s 

2025 

including  the  REPowerEU 
Austria’s  RRP, 
chapter, has a comprehensive set of reforms 
and  investments  for  the  green  transition.  As 
part of the measures covered by payment request 
submitted over the past year, measures are being 
implemented 
in  SMEs. 
Measures also include the acquisition of emission-
free vehicles, the repair bonus scheme to promote 
the repair of electric and electronic equipment. 

investments 

in  green 

gender 

equality 

supports 

Promoting  fairness,  social  cohesion  and 
improving  access  to  basic  services  are 
among  the  key  priorities  of  EU  funding  in 
Austria.  A  core  aim  of  the  ESF+  is  to  reduce 
poverty  in  Austria  by  providing  qualifications  and 
work opportunities. The ESF+ Employment and JTF 
programme 
by 
developing  measures  to  reduce  the  gender  pay 
gap,  improving  work-life  balance,  and  fighting 
gender  stereotypes.  Social  integration  enterprises 
help the long-term unemployed through social and 
educational  support  and  sustainable  jobs  under 
the  programme.  Austria’s  Asylum,  Migration  and 
Integration  Fund  (AMIF)  programme  prioritises 
integration, 
measures 
education, 
preparatory 
measures  for  employment,  housing,  healthcare, 
and  civic  participation.  It  supports  the  efficient 
processing  of  asylum  applications 
through 
specialised staff training and improved country of 
origin  analysis.  The  programme  also  aims  to 

social 
learning, 

that  promote 

language 

101 

 
 
Table A16.1:Selected EU funds with adopted allocations - summary data (million EUR) 

(1) The cut-off date for data on disbursements under the RRF is 31 May 2025. 
(2) Cohesion policy 2014-2020 allocations include REACT-EU appropriations committed in 2021-2022. 
(3) These amounts relate only to disbursements made from 2021 onwards and do not include payments made to the Member 
State before 2021.  Hence the figures do not comprise the totality of payments corresponding to the 2014-2020 allocation. The 
cut-off date for data on disbursements under EMFAF and EMFF is 29 April 2025.  The cut-off date for data on disbursements 
under cohesion policy funds, AMIF, BMVI and ISF is 5 May 2025. 
(4) AMIF - Asylum, Migration and Integration Fund; BMVI - Border Management and Visa Instrument; ISF - Internal Security Fund. 
(5) Expenditure outside the CAP strategic plan is not included. 
(6) The cut-off date for data on EARDF disbursements is 5 May 2025. The information on EAGF disbursements is based on the 
Member State declarations until March 2025.  Disbursements for the Direct Payments (EAGF) started in 2024. 
Source: European Commission 

102 

Instrument/policyDisbursed since 2021   (1)             RRF grants (including the RepowerEU allocation)1 192.0RRF loans0 Instrument/policyAllocation 2014-2020 (2)Allocation 2021-2027 Disbursed since 2021 (3)    (covering total payments to the Member State on commitments originating from both 2014-2020 and 2021-2027 programming periods) Cohesion policy (total)1 250.21 066.8 873.2European Regional Development Fund (ERDF) 694.0 521.4 507.8European Social Fund (ESF, ESF+) 556.3 409.7 323.3Just Transition Fund (JTF) 135.8 42.1European Maritime, Fisheries and Aquaculture Fund (EMFAF) and the European Maritime and Fisheries Fund (EMFF) 7.0 6.74.3Migration, border management and internal security - AMIF, BMVI and ISF (4) 136.0 217.382.1The common agricultural policy under the CAP strategic plan (5)Disbursements under the CAP Strategic Plan (6)Total under the CAP strategic plan1 887.1European Agricultural Guarantee Fund (EAGF)1 296.6European Fund for Agricultural Development (EAFRD) 590.5Allocation 2023-20276 084.33 484.22 600.1Allocation 2021-2026 3 961.20FisheriesMigration and home affairs 
 
 
     
 
Table A16.2:Summary table on 2019-2024 CSRs 

(Continued on the next page) 

103 

AustriaAssessment in May 2025Relevant SDGs2019 CSR 1Some progressEnsure the sustainability of the health, Some progressSDG 3long-term care, Some progressSDG 3and pension systems, including by adjusting the statutory retirement age in view of expected gains in life expectancy. Limited progressSDG 8Simplifyandrationalisefiscalrelationsandresponsibilitiesacrosslayersofgovernmentandalignfinancingandspendingresponsibilities.Limited progressSDG 8, 162019 CSR 2Some progressShift taxes away from labour to sources less detrimental to inclusive and sustainable growth. Some progressSDG 8, 10, 12Support full-time employment among women, including by improving childcare services, Some progressSDG 4, 5, 8, 10and boost labour market outcomes for the low skilled in continued cooperation with the social partners. Some progressSDG 8, 10Raise the levels of basic skills for disadvantaged groups, including people with a migrant background.Some progressSDG 4, 8, 102019 CSR 3Some progressFocus investment-related economic policy on research and development, innovation, Substantial progressSDG 9, 10, 11digitalisation,Some progressSDG 9, 10, 11and sustainability, taking into account regional disparities. Some progressSDG 1, 7, 8, 9, 10, 11, 13Support productivity growth by stimulating digitalisation of businesses and company growthSome progressSDG 8, 9and by reducing regulatory barriers in the service sector.Substantial progressSDG 92020 CSR 1Some progressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment. Not relevant anymoreSDG 8, 16Improvetheresilienceofthehealthsystembystrengtheningpublichealth and primary care. Some progressSDG 32020 CSR 2Some progressEnsure equal opportunities in educationSome progressSDG 4, 8, 10and increased digital learning. Some progressSDG 42020 CSR 3Substantial progressEnsure an effective implementation of liquidity and support measures, in particular for small and medium-sized enterprises,Full implementationSDG 8, 9and reduce administrative and regulatory burden.Substantial progressSDG 8, 9Front-load mature public investment projects Some progressSDG 8, 16and promote private investment to foster the economic recovery. Some progressSDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularonbasic and applied research, as well as innovation,Substantial progressSDG 9sustainable transport, Some progressSDG 11clean and efficient production and use of energy. Some progressSDG 7, 9, 132020 CSR 4Some progressMake the tax mix more efficient and more supportive to inclusive and sustainable growth. Some progressSDG 8, 10, 122021 CSR 1Not relevant anymoreIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationallyfinancedinvestment.Keepthegrowthofnationallyfinanced current expenditure under control.Not relevant anymoreSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Not relevant anymoreSDG 8, 16 
 
 
  
 
Table (continued) 

(Continued on the next page) 

104 

At the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition.Not relevant anymoreSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Not relevant anymoreSDG 8, 162022 CSR 1Some progressIn 2023, ensure that the growth of nationally financed primary current expenditure is in line with an overall neutral policy stance, taking into account continued temporary and targeted support to households and firms most vulnerable to energy price hikes and to people fleeing Ukraine. Stand ready to adjust current spending to the evolving situation. Not relevant anymoreSDG 8, 16Expand public investment for the green and digital transitions, and for energy security taking into account the REPowerEU initiative, including by making use of the Recovery and Resilience Facility and other Union funds.Not relevant anymoreSDG 8, 16For the period beyond 2023, pursue a fiscal policy aimed at achieving prudent medium-term fiscal positions. Not relevant anymoreSDG 8, 16Ensure the adequacy and fiscal sustainability of the long-term care system. Some progressSDG 3Simplify and rationalise fiscal relations and responsibilities across layers of government and align financing and spending responsibilities. Limited progressSDG 8, 16Improve the tax mix to support inclusive and sustainable growth.Some progressSDG 8, 10, 122022 CSR 2Proceed with the implementation of its recovery and resilience plan, in line with the milestones and targets included in the Council Implementing Decision of 13 July 2021. Swiftly finalise the negotiations with the Commission of the 2021-2027 cohesion policy programming documents with a view to starting their implementation. 2022 CSR 3Some progressBoost labour market participation of women, including by enhancing quality childcare services,Some progressSDG 4, 5, 8, 10and improve labour market outcomes for disadvantaged groups.Some progressSDG 8, 102022 CSR 4Some progressReduce overall reliance on fossil fuels, and diversify imports of fossil fuels,Some progressSDG 7, 9, 13 by accelerating the deployment of renewable energy and of the necessary infrastructure, in particular by simplifying planning and further streamlining permitting procedures,Some progressSDG 7, 8, 9, 13and enhancing energy efficiency, in particular in the industry and building sectors,Some progressSDG 7and diversifying energy supplies, as well as increasing flexibility and reverse-flow capacity of interconnectionsSome progressSDG 7, 92023 CSR 1Some progressWind down the emergency energy support measures in force, using the related savings to reduce the government deficit, as soon as possible in 2023 and 2024. Should renewed energy price increases necessitate new or continued support measures, ensure that these are targeted at protecting vulnerable households and firms, fiscally affordable and preserve incentives for energy savings.Some progressSDG 8, 16Ensure prudent fiscal policy, in particular by limiting the nominal increase in nationally financed net primary expenditure in 2024 to not more than 4.6%.No progressSDG 8, 16Preserve nationally financed public investment and ensure the effective absorption of RRF grants and other EU funds, in particular to foster the green and digital transitions.Full ImplementationSDG 8, 16For the period beyond 2024, continue to pursue a medium-term fiscal strategy of gradual and sustainable consolidation, combined with investments and reforms conducive to higher sustainable growth, to achieve a prudent medium-term fiscal position.Limited ProgressSDG 8, 16Ensure the adequacy and fiscal sustainability of the long-term care systemSome progressSDG 3, 8and the fiscal sustainability of the healthcare system.Some progressSDG 3, 8Simplify and rationalise fiscal relationships and responsibilities across layers of government and align financing and spending responsibilities.Limited progressSDG 8, 16Improve the tax mix to support inclusive and sustainable growth.Some progressSDG 8, 10, 12RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
 
  
 
Table (continued) 

Source: European Commission 

105 

2023 CSR 2Continue the steady implementation of its recovery and resilience plan and swiftly finalise the REPowerEU chapter with a view to rapidly starting its implementation. Proceed with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan.2023 CSR 3Some progressBoost labour market participation of women, including by enhancing quality childcare services,Some progressSDG 4, 5, 8, 10and of older workers, and improve labour market outcomes for disadvantaged groups, such as low-skilled jobseekers and people with a migrant background, including by raising their levels of basic skills.Some progressSDG 4, 5, 8, 102023 CSR 4Some progressReduce overall reliance on fossil fuels andSome progressSDG 7, 9, 13diversify gas supply sources to significantly decrease dependence on Russia.Substantial progressSDG 7, 8, 9Accelerate the deployment of renewable energy and the necessary infrastructure, in particular by simplifying permitting procedures and putting in place dedicated acceleration areas.Some progressSDG 7, 9, 13Improve energy efficiency.Some progressSDG 7, 9, 13Reduce emissions, in particular in the transport sector.Some progressSDG 7, 9, 13Step up policy efforts aimed at the provision and acquisition of skills and competences needed for the green transition.Some progressSDG 4, 7, 132024 CSR 1Some ProgressSubmit the medium-term fiscal-structural plan in a timely manner.  Full ImplementationSDG 8, 16In line with the requirements of the reformed Stability and Growth Pact, limit the growth in net expenditure in 2025 to a rate consistent with, inter alia, putting the general government debt on a plausibly downward trajectory over the medium term and respecting the 3% of GDP deficit Treaty reference value. Full ImplementationSDG 8, 16Improve the fiscal sustainability of the healthcare systemSome ProgressSDG 3, 8, 16and the long-term care system.Some ProgressSDG 3, 8, 16Simplify and rationalise fiscal relationships and responsibilities across layers of government and align financing and spending responsibilities. Limited ProgressSDG 8, 16Further improve the tax mix to reduce the tax wedgeSome ProgressSDG 8, 10, 12and support inclusive and sustainable growth.Some ProgressSDG 82024 CSR 2Address relevant challenges to allow for continued, swift and effective implementation of the recovery and resilience plan, including the REPowerEU chapter, ensuring completion of reforms and investments by August 2026. Accelerate the implementation of cohesion policy programmes. In the context of their mid-term review, continue focusing on the agreed priorities, while considering the opportunities provided by the Strategic Technologies for Europe Platform initiative to improve competitiveness.2024 CSR 3Some ProgressBoost the labour market participation of women, including by improving quality and availability of childcare services, and of older workers.Some ProgressSDG  5, 8, 10Improve labour market outcomes for disadvantaged groups, such as low-skilled jobseekers and people with a migrant background, and raise the levels of basic skills, starting from an early age, and notably at school level.Some ProgressSDG 4, 5, 8, 10Promote business dynamism, creation and growth of young companies, including through better access to risk capital.Some ProgressSDG 8, 92024 CSR 4Substantial ProgressImprove energy security by accelerating the diversification of gas supply towards non-Russian sources.Substantial progressSDG 7, 8, 9Further reduce emissions, in particular in the transport sectorSome ProgressSDGs 7, 8, 9, 11RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union.RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
  
 
ANNEX 17: COMPETITIVE REGIONS 

Austrian  regions  are  facing  the  challenge  of 
low  growth.  Although  disparities  between  its 
regions  are  limited,  some  still  persist,  such  as 
labour  productivity  or  the  distribution  of  R&D 
investment. However, Austria could benefit from a 
high rate of innovation and employment in science 
and  technology,  which  could  give  it  a  competitive 
advantage. The high proportion of charging points 
also  strengthens  Austria’s  potential  to  reduce  its 
high  greenhouse  gas 
(GHG)  emissions  by 
accelerating  the  switch  to  alternative  CO2-neutral 
fuels. 

Regional disparities in Austria are among the 
lowest  in  EU  Member  States.  Compared  to 
other  EU  Member  States  and  the  EU  average, 
Austria  maintains  a  relatively  balanced  overall 
distribution of wealth, resources and opportunities 
among its regions. 

in 

However, some regional disparities still exist. 
They  mainly  arise  from  differences  in  GDP  per 
head,  labour  productivity,  and  R&D  investment 
distribution.  There  are  also  minor 
regional 
terms  of  competitiveness  and 
variations 
innovation.  In  2023,  GDP  per  head  (in  purchasing 
power standard - PPS) in the regions of Vorarlberg, 
Tirol,  Salzburg  and  Wien  corresponded  to  126-
147% of the EU average, while it was only 84% in 
Burgenland,  the  least  developed  region  (Map 
A17.1). 

Between 2014 and 2023, the annual real GDP 
per  head  growth  was  0.6%,  below  the  EU 
average  (1.6%)  in  all  regions.  Average  annual 
growth in GDP per head over the same period was 
negative in Wien (-0.2%) (Graph A17.1), where it is 
related  to  a  substantial  increase  in  the  city’s 
population  and  in  Vorarlberg  (-0.5%).  Kärnten 
(1.4%)  experienced  the 
(1.2%)  and  Salzburg 
highest  average  annual  growth.  Wien  experienced 
a  prolonged  period  (>16  years)  of  below-average 
growth 
in  GDP  per  head,  productivity  and 
employment,  while  its  population  grew  by  more 
than  10%  (from  1.76  to  1.98  million  between 
2014 and 2023). 

Map A17.1:  GDP per head (in purchasing power 
standard PPS), 2023 

Source: Eurostat 

Graph A17.1: Average annual GDP per head growth 
vs GDP per head in 2013 

X axis: GDP per head, 2013 (PPS, index EU = 100). 
Y-axis: Annual average real growth of GDP per head, 2014-
2023 (EUR, 2015 prices, %). Bubble size: Population, 2023. 
Source: ARDECO (JRC). 

106 

WienBurgenlandNiederösterreichKärntenSteiermarkOberösterreichSalzburgTirolVorarlberg-1.0-0.50.00.51.01.52.05080110140170200GDP per head growth, 2014-2023 (%)GDP per head, 2013 (EU27=100)Capital regionOther NUTS2 regionsLinear (National average)Linear (EU27_2020) 
 
 
 
 
 
            
 
 
 
Table A17.1:Selection of indicators at regional level in Austria 

Source: Eurostat and JRC 

Competitiveness 

Graph A17.2: Labour productivity per hour 

in 

overall 

performance 

Significant  differences  between  Austrian 
regions  remain  in  labour  productivity.  The 
labour 
country’s 
productivity, measured as GDP per hour worked in 
PPS,  was  120%  of  the  EU  average  in  2022.  It 
ranged  from  149%  in  Vorarlberg  to  100%  in 
Burgenland.  The  average  annual  growth  of 
productivity  per  hour  worked  between  2013  and 
2022 (0.8%) was slightly below the EU average of 
0.9%.  The  highest  growth  rate  was  reported  in 
Salzburg  and  Kärnten,  with  an  average  growth  of 
1.5-1.6%,  which  increased  the  gap  with  the  less 
performing  regions  (Graph  A17.2).  Wien  had  the 
lowest  growth  rate,  with  an  annual  average 
change  of  0.2%,  closely  followed  by  Burgenland 
(0.4%).  

Austria  has  one  of  the  highest  commuting 
rates of all Member States. In 2023, 12.1% of 
employed commuted, compared to the EU average 
of  7.5%.  The  commuting  rate  was  highest  in  the 
regions  surrounding  the  capital  city,  namely 
Burgenland (38.1%), and Niederösterreich (28.6%), 
indicating  that  a  large  portion  of  the  workforce 
commutes  to  the  Wien  region.  These  regions 
exhibit lower productivity and GDP per head. 

Unit: Real GDP per hour worked (EUR, 2015 prices) 
Source: ARDECO (JRC) 

behind 

factors 

significant 

Human  capital  and  sectoral  specialisation 
the 
are 
productivity  trends.  In  2024,  employment  in 
high-tech sectors exceeded the EU average (5.2%) 
in  Wien  (7.9%)  and  Kärnten  (5.9%),  with  other 
regions  ranging  from  2.8%  to  5.1%.  At  the  same 
time,  all  regions  had  a  higher  percentage  of 
human  resources  in  science  and  technology  than 
the  EU  average 
(49.2%),  except  Vorarlberg 
(47.3%). This percentage has grown steadily since 
2012, 
competitive 
advantage,  which  is  also  reflected  in  the  high 
number  of  foreign  doctoral  students  and  the 
co-
international 
proportion 
publications, 
co-
publications. 

scientific 
public-private 

demonstrating 

including 

Austria’s 

of 

107 

3035404550556065201220132014201520162017201820192020202120222015 EUR per hour workedOther NUTS 2 regionsCapital regionNational averageEU27GDP per head (PPS)Real GDP per head growthProductivity - GDP per person employed (PPS)Real productivity growth (per person employed)Productivity - GDP per hour worked (PPS)Real productivity growth (per hour worked)R&D expenditureRegional Competiti-veness IndexPopulation growthPopulation aged 65+Unemploy-ment rateAt-risk-of-poverty or social exclusionIndex EU-27 = 100Average annual % changeIndex EU-27 = 100Average annual % changeIndex EU-27 = 100Average annual % change% of GDPIndex EU-27 = 100Average annual change per 1000 residents% of total population% of labour force% of total population20232014-202320232014-202320222013-2022202120222014-2023202420242024European Union (27 MS)1001.61000.61000.92.31001.721.65.921.0Austria1200.61120.21200.83.21147.419.85.216.9Burgenland840.7940.01000.40.81064.923.94.910.0Niederösterreich980.51070.11170.71.81195.921.34.212.4Wien138-0.2118-0.31290.24.011912.716.49.428.2Kärnten1081.21090.81101.53.11062.523.54.315.7Steiermark1120.91040.31050.75.21104.421.64.414.4Oberösterreich1240.91140.51201.13.61147.119.73.815.0Salzburg1471.41231.21281.61.81116.720.03.411.1Tirol1260.51080.21201.03.21107.219.33.113.4Vorarlberg126-0.5120-0.81491.01.91118.918.54.117.9 
 
           
 
  
 
Austria’s  R&D  intensity  ranked  third  in  the 
EU in 2022, with marked differences between 
the  regions.  At  national  level,  R&D  expenditure 
stood at 3.2% of GDP in 2022, which is above the 
(2.3%).  The  proportion  of  R&D 
EU  average 
expenditure in Steiermark was more than twice as 
high 
regions  Vorarlberg, 
the 
Niederösterreich,  Salzburg  and  Burgenland,  this 
figure was below the EU average, ranging between 
0.8%  and  1.9%  of  GDP.  The  fact  that  R&D 
expenditure  in  Austria  is  above  the  EU  average 
indicates potential that could be further developed 
for  the  benefit  of  all  Austrian  regions  (see  Annex 
3). 

(5.2%). 

In 

as 

classified 

Performance  in  innovation  is  above  the  EU 
average,  with  minor  differences  across  the 
Austrian  regions.  In  2023,  Ostösterreich  was 
classified  as  a  ‘Leader’  while  Westösterreich  and 
Südösterreich  were 
‘Strong 
Innovators’. Austria lags behind the EU average in 
terms  of  non-R&D  innovation  expenditure  and  in 
exports  of  knowledge-intensive  services.  It  would 
therefore  be  beneficial  for  Austria  to  harness  its 
strong  potential  and  know-how  as  a  very  good 
innovator  and  its  above  EU  average  employment 
in  science  and  technology  to  improve  in  areas 
where it is lagging behind. This development could 
also  be  positively  influenced  by  rapidly  increasing 
broadband penetration, which is still below the EU 
average  but  has  been  rising  steadily  since  2017 
and is expected to accelerate further, thanks to the 
plan to roll out broadband by 2030. 

All  Austrian  regions  ranked  above  the  EU 
average (100) in terms of competitiveness in 
2022.  Ranging 
in  Wien  and 
from  118.9 
Niederösterreich  to  105.9  in  Kärnten,  the  index 
shows no significant regional differences. 

Map A17.2:  Regional Competitiveness Index 2.0, 
2022 edition 

Source: DG REGIO, JRC based on Eurostat 

Social fairness 

in 

Minimal  disparities 
labour  market 
conditions existed in 2024, with Wien lagging 
behind. The unemployment rate was below 5% in 
all  regions  except  Wien,  where  it  reached  9.4%. 
The  national  average  (5.2%)  was  lower  than  the 
EU  average  (5.9%).  Unemployment  was  much 
higher  in  cities  (8.2%)  than  in  rural  areas  (3.1%). 
Labour markets improved in most regions over the 
past  10  years,  with  Kärnten  experiencing  a 
substantial  1.8  percentage  point  decrease  in  the 
unemployment  rate.  Low  unemployment,  coupled 
with  a  high  job  vacancy  rate  at  around  3.8%  in 
Q3-2024, pointed to existing labour shortages (see 
Annex 10). 

Demographic change could have a significant 
impact  on  Austria’s  regions  in  the  future. 
Nationally,  the  population  grew  by  an  annual 
average of 7.4 per 1 000 residents between 2014 
and  2023,  driven  primarily  by  positive  net 
migration (7.5 per 1 000 residents) over the same 
period.  Increases  were  significant  in  the  large 
agglomeration  NUTS 3 
of  Wiener 
Umland/Nordteil,  Graz  and  Wien  (9.7  to  12.7  per 
1 000  per  year).  Conversely,  some  sub-regions  of 
Steiermark,  Kärnten,  Niederösterreich  and  Tirol 
witnessed  a  decline  of  -0.3  to  -3.4  per  1 000  per 
year.  These  trends  reflect  ongoing  rural-urban 
transitions  across  Austria,  contributing  to  the 
growth of urban populations and the expansion of 
conurbations. 

regions 

108 

 
 
 
 
Population  ageing  is  a  major  challenge  for 
Austria, with strong societal implications. The 
percentage of the population aged 65 and over is 
currently one of the lowest in the EU, at 19.8% in 
2024, but it is expected to rise significantly in the 
future.  Some  regions  are  already  experiencing  a 
decline  in  the  working-age  population,  suggesting 
that  demographic  challenges  will  put  pressure  on 
the labour market and may affect Austria’s ability 
to grow in the medium to long term. 

There  are  regional  disparities  in  the  risk  of 
poverty or social  exclusion  (AROPE)  between 
Wien and the other regions. By 2024, Austria’s 
AROPE  rate  (16.9%)  was  below  the  EU  average 
(21.0%),  as  were  those  of  most  regions  except 
Wien  (28.2%).  The  Wien  region  also  has  the 
highest 
rate  of  unemployment  and  youth 
unemployment, as well  as the highest percentage 
of  young  people  not  in  employment,  education  or 
training, the latter two exceeding the EU average. 

Affordable  housing  remains  a  challenge  in 
some regions. Housing prices in the capital region 
Wien  are  exceptionally  high,  with  100  square 
metres of living space costing nearly 17 times the 
average  annual  income  in  2019.  The  national 
average of this factor is 9.7 and is also exceeded 
in  the  western  regions  of  Vorarlberg,  Tirol  and 
Salzburg.  By  contrast,  the  price-to-income  ratio  is 
significantly  lower  in  Steiermark  and  Burgenland 
(Map  A17.3).  The  proportion  of  social  housing  is 
higher  than  in  other  Member  States,  accounting 
for  24%  of  the  housing  stock  and  providing 
affordable  housing  for  both  low-  and  middle-
income  households.  In  Wien,  the  proportion  of 
municipal and/or cooperative housing accounts for 
half of the housing market. Austria could consider 
measures  to  spread  the  success  of  the  Viennese 
model of social housing throughout the country. 

Map A17.3:  House prices relative to income, 2019 

Source: European Commission, Mapadomo 

There  are  limited  differences  in  access  to 
basic  services 
in  rural  areas.  Access  to 
hospitals in Austria’s rural areas is relatively good 
across  the  territory  (Graph  A17.3).  All  regions  are 
close  to  the  EU  average  (29%),  with  the  lowest 
figures  in  Tirol  and  Kärnten.  The  percentage  of 
children in rural areas living less than 15 minutes’ 
walk from the nearest primary school is the same 
as  the  EU  average  of  31%.  However,  there  are 
significant  regional  differences.  Most  regions  are 
below  average,  but  Burgenland,  Tirol  and 
Vorarlberg are above 40%. Greater fairness across 
the  country  could  be  achieved  through  improving 
access  to  basic  services,  including  education  and 
healthcare, with a particular focus on areas where 
challenges related to access remain. 

109 

 
 
 
 
Graph A17.3: Access to healthcare and primary 
education in rural areas, 2023 

development  of  Austria’s  network  of  charging 
points could help to reduce its high GHG emissions 
from transport. 

Units: Percentage of population in rural areas that can reach 
nearest hospital within 10 minutes by car (EU-27); 
Percentage of children in rural areas under 15 who can reach 
primary school within 15-minute walk (EU-24). 
Source: Eurostat 

Sustainability 

followed  by  Steiermark 

Austria’s  average  GHG  emissions  per  head 
exceeded the EU average of 7.1 tonnes of CO2 
equivalent  by  0.9  tonnes  in  2023.  The  highest 
value  was  recorded  in  Oberösterreich,  with  12.3 
(10.8)  and 
tonnes, 
Niederösterreich 
regions 
(Vorarlberg,  Tirol  and  Salzburg)  are  among  the 
regions  with  the  lowest  GHG  emissions  (between 
4.4  and  6.8  tonnes)  and  the  lowest  concentration 
of  particulate  matter  2.5  and  10  µg/m³  in  2023. 
Wien has the lowest proportion of GHG emissions 
(2.2)  of  all  NUTS 2  regions  but  the  highest 
concentration of pollutants. 

(10.7).  The  western 

to 

vehicle 

electric 

Access 
charging 
infrastructure surpassed the EU average (287 
charging  points  on  average  within  10  km  of 
people's  homes)  with  a  national  average  of  444 
charging  points  within  10 km.  However, Wien, the 
best  performing  NUTS 2  region,  exceeds  the  EU 
average  by  a  factor  of  five,  while  other  regions 
(284).  The  further 
remain  below  EU  average 

(284) Indicators of access to alternative fuel infrastructure are based on 

calculations by DG REGIO and the JRC, using data from the 
European Alternative Fuels Observatory (EAFO), Eurostat, TomTom 
and Eco-Movement.  

110 

0204060SteiermarkKärntenOberösterreichSalzburgNiederösterreichTirolVorarlbergBurgenlandAustriaEuropean UnionAccess to healthcare (% of population)Access to primary school (% of children under 15)