Facts on Austria and its banks 2026
Summary
Austria's economy has remained resilient despite several international crises in recent years. Employment growth remained positive in 2025 in the face of the difficult environment, and hours worked recovered again. Inflation rose somewhat in 2025 as various energy price-reducing measures such as the electricity price brake expired. It will, however, be significantly lower in 2026, according to the the OeNB's most recent economic outlook. In these economically uncertain times, the resilience of Austria’s economy is supported by a well-balanced, service-oriented economic structure as well as highly diversified manufacturing. Challenges arise from low growth potential in the medium term, which is characterised by unfavourable demographic developments and increasing international competition.
The Austrian banking system proved resilient in 2025 despite heightened geopolitical uncertainty. Continued high profitability, also driven by significant profit contributions from Central, Eastern and Southeastern Europe (CESEE), strengthened banks' capitalisation and thus financial market stability.
In 2025, the Austrian banking sector achieved its second-highest result to date. Capital and liquidity levels remained robust and well above regulatory requirements. While lending, particularly in residential real estate financing, gained momentum again, risks in the commercial real estate sector increased.
Highlights
GDP growth close to potential in 2026
The Austrian economy is growing close to its potential, and thus more slowly than in past recovery phases. Since the beginning of 2026, the international environment has been highly uncertain and economically volatile.
International competitiveness proves stable
Relative unit labour costs vis-à-vis the euro area are not expected to deteriorate further in 2026. Austria’s price competitiveness has thus started to stabilise after years of marked losses. Recording another positive result in 2025, the current account likewise reflected the competitiveness of the Austrian export sector.
High banking sector capitalisation
Thanks to the high profitability in recent years, the Austrian banking sector has reached the highest level of capitalisation in its history.
Risks in the commercial real estate sector
Risks in the commercial real estate sector remain elevated. The sectoral systemic risk buffer for commercial real estate has specifically strengthened banks’ resilience. The OeNB continuously monitors current developments using for instance its commercial real estate and housing real estate dashboards.