Reports
Calendar of Monetary and Economic Highlights
Economic Background
Money and Credit in the First Half of 2003
Balance of Payments in the First Quarter of 2003
Austria’s Portfolio Investment Position in the First Quarter of 2003
Financial Investment and Financing of Households in the First Quarter of 2003
Austria’s External Debt − A New Indicator of the SDDS
Studies
Understanding the Impact of External Trade and International Capital Flows on Euro Area
Monetary Growth and Austria’s Contribution from 1999 to 2002:
The Monetary Presentation of the Balance of Payments
With the globalization of economic relations in the 1990s, the volume of trade and, in particular, international capital flows expanded at a fast rate. Given this high degree of openness of the national economies, central banks have to pay special attention to the implications of crossborder transactions for monetary developments and prices in the euro area when taking monetary policy decisions. The monetary presentation of the euro area balance of payments compiled by the Directorate General Statistics of the European Central Bank captures the impact of the external economy – specifically international capital movements – on money supply in the euro area and contributes to the quality of the monetary indicator M3. In the years 1999 to 2002, the influence of international trade and capital flows on money supply in the euro area shifted from restrictive to expansionary. Throughout this period, Austria’s economic relations with the extraeuro area contributed to M3 growth in the euro currency area.
Structural Factors in the Austrian Housing and Real Estate Market
Developments in the housing markets are interrelated with macroeconomic trends in a number of ways. Changes in house prices have an impact on the aggregate demand, consumption and inflation of an economy since housing wealth is an important part of the net worth of the private sector. Moreover, strong fluctuations in the valuation of and in expectations about house prices have caused financial crises in the past.
This paper analyzes the specific features of the Austrian housing and real estate market and recent developments, describing the available financing options, bank exposure to real estate loans, house price developments and the housing-related tax/subsidy regime. In summary, it can be said that developments in the Austrian housing and real estate market show both similarities with and considerable differences from the European trend. The objectives and priorities of domestic housing policies, while different from those of other EU countries, have proven to be a successful and adequate approach.
Fostering Economic Growth in Europe – Results of the 31st Economics Conference of the Oesterreichische Nationalbank
The 31st Economic Conference of the Oesterreichische Nationalbank focused on the issue of economic growth. The initial question was: Why are Europe’s growth rates lagging behind those of the U.S.A.? Five sessions discussed the links between growth and labor markets, investment, fiscal policy and financial markets. Apart from investments in information and communication technologies, specific deregulation measures, tax incentives and higher expenditures for research and development were considered the key points for an increase in European growth rates. There was also a broad consensus about the necessity of structural reforms in the labor markets. From a fiscal policy perspective, the speakers considered fiscal consolidation essential to high and sustained growth. They equally emphasized the role of stable and internationally integrated financial markets for achieving optimal capital allocation. Highly efficient systems of financial regulation were cited as a guarantee for the smooth functioning of financial markets.
The Bank Lending Survey for the Euro Area –
Background, Objectives and Results for Austria
In order to enhance the knowledge of financing conditions for businesses and households, the euro area national central banks (NCBs) – and thus the Oesterreichische Nationalbank (OeNB) in Austria – together with the European Central Bank (ECB) began to conduct quarterly surveys on euro area lending policies in January 2003. In the course of this survey, 86 leading banks from all euro area countries – 5 of which are from Austria – are asked to fill in a questionnaire. All in all, the Austrian results indicate that banks have become more cautious in lending. The Austrian credit institutions surveyed appear to be particularly cautious in corporate lending, while the tightening of credit standards for loans to households appears to be somewhat less pronounced. According to the banks surveyed, cyclical risk aspects are the reason behind this behavior, which indicates that there is no credit crunch – another indicator for this assumption may be the comparably stronger decline in the demand for loans. Since the first bank lending survey, however, banks have become less cautious in lending. All told, the Austrian results more or less match those for the entire euro area.