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Austria Q2 GDP Fall Worst Since WWII

Austria's economic output collapsed at a sharp rate in the second quarter, thanks to the disruption caused by the coronavirus, or Covid-19, pandemic, pushing the economy into a recession that is the worst since the second world war, preliminary estimates from the Austrian Institute of Economic Research, or WIFO, showed on Thursday.

Gross domestic product decreased 12.8 percent year-on-year following a revised 2.8 percent decline in the first quarter, the think tank said.

Compared to the previous three months, GDP dropped 10.7 percent in the second quarter after a 2.4 percent drop in the three months to March.

The measures to contain the pandemic and the gradual opening of trade and service sectors between mid-April and the end of May had a decisive impact on economic development, WIFO said.

The 27.8 percent year-on-year slump in the trade, maintenance and repair of motor vehicles, transportation and storage, accommodation and food service activities, deducted 5.4 percentage points from GDP. This was responsible for almost half of the decline in GDP in the second quarter.

The sector that includes sports and recreation, arts and entertainment as well as other personal services saw a 32 percent annual fall in value added, leading to a 0.8 percentage points deduction from GDP.

In the mining, manufacturing, energy and water supply and waste management sectors, the value added fell 20.9 percent year-on-year and in the construction industry, it recorded a decline of 9.2 percent from last year.

Meanwhile, the information and communication, financial and insurance activities, real estate and public administration sectors were resilient to the crisis.

Household consumption shrank 15.9 percent year-on-year, while state spending grew 1.9 percent. Gross capital formation decreased 13.5 percent with fixed investment falling 10.9 percent. Exports dropped 18.1 percent and imports fell 15.3 percent.

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