The previous administration under former President Donald Trump is giving strong consideration to tariffs that would be prohibitively large. The drugs tariffs clearly have the potential to damage Austria’s economy by …Yet, calculations indicate that Austria will be hit much harder by these tariffs compared to the other Eurozone member states. As a consequence, Austria’s economic growth will be cut roughly in half. This possible fiscal impact comes at a time of long-term, economically damaging low economic growth. This trend is likely to keep distorting the labor market over the next few quarters.
Austria’s economy is facing a wide-spread nasty increase in economic output in 2024. Particularly painful is a historic collapse over the past year in investments and exports. As the attention turns to what may be said in Fedspeak and in Trump’s impending Oval Office Address, markets seem to already be reacting. The EUR/USD is facing marginally steeper losses, heading back to 1.0800 in action on Friday morning in Europe. At the same time, with the pair GBP/USD also in the red and settling to the south of 1.2950 early in the European session.
Beyond outside trade forces, the storm continues to rage at home. The expiring electricity price brakes will increase upward pressure on electricity prices. At the same time, increasing grid charges are projected to add to this jump in early-to-mid 2025. Hold on, because we have some very exciting news. Relief on the way The overall inflation rate is projected to fall considerably in 2025, offering consumers some much anticipated relief.
Gold prices are falling for the second straight day, as traders start some profit-taking. Regardless, the long-term weekly trend remains positive. The precious metal is trading just under $3,030 at this point. Just yesterday, it set a new all-time high, this time at $3,057.
Amidst these economic dynamics, the importance of finding the right partner to navigate the Forex market is underscored, whether for beginners or seasoned experts. The volatility and opportunity in the currency market is illustrated by the pair USDCAD.
"It should not be a matter of tearing up roots but of slowly training a plant to grow in a different direction," said economist John Maynard Keynes, reflecting on the need for strategic economic adjustments.
On an economic/fiscal front, the new Austrian government has already adopted effective austerity measures designed solely for budgetary consolidation. Together, these initiatives are projected to lower Germany’s federal deficit under the critical 3% threshold by 2025. This step would be a positive step towards blocking an upcoming excessive deficit procedure by the European Commission. This kind of fiscal discipline will be an absolutely necessary prerequisite to stabilize Austria’s economic foundation at a time of high uncertainties all over the world.