[ad_1]
The economic forecast presented yesterday by the Institute for Economic Research (Wifo) and the Institute for Higher Studies (IHS) was unusual in all respects. There was talk of the worst recession since World War II, but also that the recovery of the economy depends on how the population behaves in the coming weeks and months.
Therefore, both the director of Wifo, Christoph Badelt, and the head of IHS, Martin Kocher, made an urgent call to the Austrians to strictly comply with the hygiene requirements of the government. “Please behave in such a way that the number of infections decreases again,” Badelt said. Kocher joined this appeal. “There is a close connection between mood and economic activity. Mood, in turn, is closely related to the number of infections,” Kocher said.
Wifo’s boss, Badelt, described the last few months with a traffic light. In the second trimester, in the lockdown phase, she was red. It then quickly jumped to green when restrictive measures were relaxed. The current situation is difficult to describe. “You could call them flashing yellow or pale green,” Badelt said.
In their forecast (see graph), both institutes assumed that there would be no new lockdown and that a vaccine would be available in the second quarter of 2021 at the latest or that it was becoming clear that it would soon be available.
No additional measures
Both economic researchers stated that other measures to support the economy currently do not make sense. “It’s more about actually implementing the measures that have already been decided or allowing them to work,” Badelt said. Much of the money promised by the government has yet to be requested.
When asked if the government’s measures had been correct so far, Badelt responded with a counter-question: “What would have happened if there hadn’t been a limited-time assignment?” However, measures to combat the pandemic should be reduced in due course, Kocher said. Such measures would have to be timely, time-limited and specific to be effective.
Grim labor market forecast
According to the Wifo boss, given that the unemployment rate is likely to rise to almost ten percent this year by national definition, labor market policy should be stepped up. “There is a correlation between staffing in the labor market service and the quality of advice,” Badelt said.
The announced labor foundation is being created to prevent a solidification of unemployment, Kocher said. Badelt would like for the foundation, for him a kind of “special AMS budget”, measures for the qualification of children through apprenticeships to special programs for older employees.
Badelt also pointed out that there are other important issues besides the crown crisis, such as climate care or protection. “It will be necessary to re-prioritize. We must also return to consolidation,” said the Wifo boss. (hn)
