Wealth Comparison: Austria Vs Germany

Germany and Austria are two of the strongest economies in Europe. Germany has the largest economy in Europe and the fifth-largest in the world in PPP terms. Austria, on the other hand, has a smaller but well-developed market economy with a high standard of living. Both countries have highly skilled labour forces, strong industrial sectors, and large service sectors. In terms of purchasing power, Switzerland and Germany have been reported to be more expensive than Austria, with Munich being as expensive as Switzerland.

Austria's GDP growth in 2017

Austria has a highly developed social market economy, with the country being one of the fourteen richest in the world in terms of GDP per capita. In 2024, Austria had a nominal GDP per capita of $58,669, ranking 13th.

From 1992 to 2017, Austria's average GDP growth was 13th among OECD countries. During this period, population growth was a strong factor, with a 1.37% increase over the average.

In 2016, Austria's GDP growth was 1.5%. Unfortunately, the source does not specify whether this figure is in comparison to the previous year or relative to a base year.

In 2017, there were over 245 merger and acquisition (M&A) deals in Austria, with a combined value of over 12.9 billion EUR. This indicates a vibrant M&A landscape in the country, with companies actively pursuing transactions to expand their businesses.

Germany's budget surplus

This financial windfall provided a boost to Angela Merkel, who was seeking re-election as chancellor at the time. It's worth noting that Germany had also recorded an even larger surplus of €28.8 billion in the second half of 2000, which was augmented by a government windfall from mobile phone license sales.

Fast forward to November 2024, and Germany's budget surplus hit another record high. While the exact amount of this surplus is not publicly available, it underscores Germany's consistent economic strength and prudent fiscal management.

Germany's commitment to a balanced budget, often referred to as the "black zero," has been a key tenet of its fiscal policy. This stance has been championed by German finance minister Wolfgang Schäuble, who has advocated for fiscal discipline and opposed the transfer of funds from richer EU member states to poorer-performing economies.

In contrast, Austria has faced challenges with its budget and has seen its unemployment rate rise. However, it's important to note that Austria's economic situation is improving, and it still boasts a higher purchasing power than Eastern Germany, with the exception of Munich, which is notably expensive.

Austria's unemployment rate

In 2020, Austria had the tenth-lowest unemployment rate in the EU, with an overall rate of 5.4% compared to the EU average of 7.1%. Austria's employment rate in the 15-64 age range was 72% in 2020, higher than the EU average of 68%. The employment rate was highest among 25-54 year-olds at 84%. It was lower among youth and young adults (15-24 years), with a rate of 50%, as many are still pursuing their education. The unemployment rate for 15-24 year-olds was almost twice the overall average at 10.5%.

Germany's economic growth

Germany's economy is a highly developed social market economy, and it is the largest national economy in Europe. Germany is the third-largest economy in the world by nominal GDP and the sixth-largest by PPP-adjusted GDP. Germany is a founding member of the European Union and the Eurozone.

Germany's economy is facing some serious challenges, including aging, underinvestment, and too much red tape. Germany was the only G7 economy to shrink last year and is projected to be the slowest-growing economy in the G7 this year. The shutdown of Russian gas in 2022 contributed to spiking inflation and cost-of-living pressures. However, wholesale gas prices have since fallen back to 2018 levels.

Germany's economy is expected to decline by 0.1% in 2024, marking the second year of negative growth. High uncertainty has impacted consumption and investment, and the trade outlook has worsened due to weakening global demand for industrial goods. However, Germany's economy is projected to recover, with GDP growth of 0.7% in 2025 and 1.3% in 2026. This growth will be driven by increasing real wages, which will boost domestic demand.

Germany's service sector contributes around 70% of the total GDP, while industry and agriculture contribute 29.1% and 0.9%, respectively. Germany is a leading exporter, with $1.81 trillion worth of goods and services exported in 2019. The country's top exports include vehicles, machinery, chemical goods, electronic products, and electrical equipment. Germany is also a leading producer of wind turbines and solar power technology, and it has been called "the world's first major renewable energy economy."

Germany's economic strength is underpinned by its highly qualified workforce, developed infrastructure, large capital stock, low level of corruption, and high level of innovation. The country has a strong social security system, and it is recognized for its specialized small and medium-sized enterprises, known as the Mittelstand model.

Austria's exports

Machinery, including computers, was Austria's top export category in 2023, generating US$38.2 billion, or 17.1% of total exports. This was followed by electrical machinery and equipment, which accounted for $24.1 billion (10.8%) of exports. Vehicles were the third-largest export category, worth $22.1 billion (9.9%) to the Austrian economy. Pharmaceuticals also played a significant role, with exports worth $17.6 billion (7.9%). Iron and steel exports contributed $9.3 billion (4.2%) to the economy, while plastics and plastic articles accounted for $8.9 billion (4%). Mineral fuels, including oil, generated $8 billion (3.6%) of exports, and articles of iron or steel contributed $7.7 billion (3.4%). Organic chemicals and optical, technical, and medical apparatus rounded out the top ten export categories, with $7.4 billion (3.3%) and $6 billion (2.7%) respectively.

In addition to goods, Austria also exports a significant amount of services. In 2020, Austrian service exports were valued at $52.8 billion, with miscellaneous business, professional, and technical services; other transport; and personal travel being the top exported services.

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