Thaindian News

Vienna, Dec 10 (IANS) Global financial crisis would cause stagnation of Austrian economy, said the country’s central bank Austrian National bank (OeNB) Friday.

According to OeNB, Austrian economic growth rate in the fourth quarter this year would be zero. In the first and second quarters next year it would only reach 0.1 percent respectively, reported Xinhua.

OeNB chief economist Peter Mooslechner even expected a negative economic growth for one or two quarters in Austria.

OeNB President Ewald Nowotny told the press that the stagnation may last for a longer period, a scenario for which the Austrian government must be prepared.

The Austrian government thus needs to make adjustments in public finance, said Nowotny. In particular, it would be necessary for the government to reduce its deficit, as the current budget deficit of Austria is too high, he added.

He also said that it is necessary for Austria to limit the proportion of national budget deficits by drawing up the related law, hoping that this measure could be implemented by the government to limit the public debt as soon as possible.

It was expected that the Austrian economy would recover slightly starting in summer or fall of 2012. The annual growth rate of Austrian economy next year would reach 0.7 percent, according to the forecast of OeNB.

The annual average growth rate of Austrian economy this year was expected to reach 3.3 percent, profiting from the rapid growth during the first half of this year, said the OeNB.