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Even without an official lockdown, winter tourism is threatened with something of a lockdown due to travel advisories. That would put additional strain on the Austrian economy.
1:38 pm, October 27, 2020
A second lockdown “would be an extreme burden” on Austria’s economy and jettison economic forecasts for this year and 2021, Wifo chief Christoph Badelt said on Tuesday. Badelt does not fear a collapse of the national economy in the sense that “you can no longer get what you want to buy”, but he does. something like a progressive blockade is emerging for very important winter tourism.
This is solely due to travel advisories and the growing number of infections both in Austria and in the countries where Austrian vacationers potentially come from, as the director of the Institute for Economic Research (Wifo) said in Ö1 lunch magazine. For a tourism company, it is ultimately irrelevant “whether it has to close because no guests are coming or whether it is ordered to close.”
Alone the collapse of more or less winter tourism could depress the growth rate by up to one and a half percentage pointssays Badelt. “We have more than half the usual annual production value in tourism in winter tourism.”
Stronger decline
So far, Wifo has seen a decrease in gross domestic product (GDP) of 6.8 percent for this year and an increase of 4.4 percent is expected next year. But that was calculated assuming Austria will control the corona pandemic next year and that a second lockdown will not be necessary, Badelt said. But Wifo also expected alternative scenarios with lockdown: in this case, economic output would be reduced by more than 9 percent this year. and next year there would be more or less stagnation. “The unemployment rate would also increase enormously,” said the Wifo boss.
Now politicians are being asked. Without economic countermeasures, bankruptcies and unemployment would rise further. It depends a lot on the extent to which the government currently extends temporary measures such as short-time work or fixed-cost subsidy.
It is good to put the truth on the table. “If the numbers stay that high, we will face an even more massive economic crisis simply because of the collapse of winter tourism,” Badelt said. And if there were a blockage of other economic sectors due to the growing number of infections, the public sector would have to “dig much more in its pockets” than is currently planned in the budget to maintain operations.
In response to criticism that state aid came too late and inadequately, Badelt said: “A large-scale economic stimulus program is already underway, but it is true that not all has yet.” You have to see if this is due to bureaucratic hurdles. With many economic stimulus programs, the effect is delayed a bit.
