Austria is one of the 14 richest countries in the world in terms of GDP (Gross domestic product) per capita, has a well-developed social market economy, and a high standard of living. Until the 1980s, many of Austria's largest industry firms were nationalised; in recent years, however, privatisation has reduced state holdings to a level comparable to other European economies. Labour movements are particularly strong in Austria and have large influence on labour politics. Next to a highly developed industry, international tourism is the most important part of the national economy.
Germany has historically been the main trading partner of Austria, making it vulnerable to rapid changes in the German economy. However, since Austria became a member state of the European Union it has gained closer ties to other European Union economies, reducing its economic dependence on Germany. In addition, membership in the EU has drawn an influx of foreign investors attracted by Austria's access to the single European market and proximity to the aspiring economies of the European Union. Growth in GDP accelerated in recent years and reached 3.3% in 2006.
In 2004 Austria was the fourth richest country within the European Union, having a GDP (PPP) per capita of approximately €27,666, with Luxembourg, Ireland, and Netherlands leading the list.
Vienna was ranked the fifth richest NUTS-2 region within Europe (see Economy of Europe) with GDP reaching €38,632 per capita, just behind Inner London, Luxembourg, Brussels-Capital Region and Hamburg.
Growth has been steady in recent years 2002–2006 varying between 1 and 3.3%.
Ever since the end of the World War II, Austria has achieved sustained economic growth. In the soaring 1950s, the rebuilding efforts for Austria lead to an average annual growth rate of more than 5% in real terms and averaged about four point five percent through most of the 1960s. Following moderate real GDP growth of 1.7%, 2% and 1.2%, respectively, in 1995, 1996, and 1997, the economy rebounded and with real GDP expansion of 2.9 percent in 1998 and 2.2% in 1999.
Austria became a member of the EU on 1 January 1995. Membership brought economic benefits and challenges and has drawn an influx of foreign investors attracted by Austria's access to the single European market. Austria also has made progress in generally increasing its international competitiveness. As a member of the economic and monetary union of the European Union (EMU), Austria's economy is closely integrated with other EU member countries, especially with Germany. On 1 January 1999, Austria introduced the new Euro currency for accounting purposes. In January 2002, Euro notes and coins were introduced, replacing those of the Austrian schilling.
In Austria, Euros appear as 1999, however all Austrian euro coins introduced in 2002 have this year on it; unlike other countries of the Eurozone where mint year is minted in the coin. Eight different designs, one per face value, were selected for the Austrian coins. In 2007, in order to adopt the new common map like the rest of the Eurozone countries, Austria changed the common side of its coins.
Before adopting the Euro in 2002 Austria had maintained use of the Austrian schilling which was first established in December 1924. The Schilling was abolished in the wake of the Anschluss in 1938 and has been reintroduced after the end of the World War II in November 1945.
Austria has one of the richest collection of collectors' coins in the Eurozone, with face value ranging from 10 to 100 euro (although a 100,000 euro coin was exceptionally minted in 2004). These coins are a legacy of an old national practice of minting of silver and gold coins. Unlike normal issues, these coins are not legal tender in all the eurozone. For instance, a €5 Austrian commemorative coin cannot be used in any other country.
Many of the country's largest firms were nationalised in the early post-war period to protect them from Soviet takeover as war reparations. For many years, the government and its state-owned industries conglomerate played a very important role in the Austrian economy. However, starting in the early 1990s, the group was broken apart, state-owned firms started to operate largely as private businesses, and a great number of these firms were wholly or partially privatised. Although the government's privatisation work in past years has been very successful, it still operates some firms, state monopolies, utilities, and services. The new government has presented an ambitious privatisation programme, which, if implemented, will considerably reduce government participation in the economy. Austria enjoys well-developed industry, banking, transportation, services, and commercial facilities.
Austria has a strong labour movement. The Austrian Trade Union Federation (ÖGB) comprises constituent unions with a total membership of about 1.5 million—more than half the countries wage and salary earners. Since 1945, the ÖGB has pursued a moderate, consensus-oriented wage policy, cooperating with industry, agriculture, and the government on a broad range of social and economic issues in what is known as Austria's "social partnership". The ÖGB has often opposed the Schüssel government's programme for budget consolidation, social reform, and improving the business climate, and indications are rising that Austria's peaceful social climate could become more confrontational.
Austrian farms, like those of other west European mountainous countries, are small and fragmented, and production is relatively expensive. Since Austria's becoming a member of the EU in 1995, the Austrian agricultural sector has been undergoing substantial reform under the EU's Common Agricultural Policy (CAP). Although Austrian farmers provide about 80% of domestic food requirements, the agricultural contribution to gross domestic product (GDP) has declined since 1950 to less than 3%.
Although some industries are global competitors, such as several iron and steel works, chemical plants and oil corporations that are large industrial enterprises employing thousands of people, most industrial and commercial enterprises in Austria are relatively small on an international scale.
Most important for Austria is the service sector generating the vast majority of Austria's GDP. Vienna has grown into a finance and consulting metropole and has established itself as the door to the East within the last decades. Viennese law firms and banks are among the leading corporations in business with the new EU member states. Tourism is very important for Austria's economy, accounting for around 10 percent of Austria's GDP. In 2001, Austria was the tenth most visited country in the world with over 18.2 million tourists. Previously, dependency on German guests made this sector of the Austrian economy very dependent on German economy. However recent developments have brought a change, especially since winter ski resorts such as Arlberg or Kitzbühel are now more and more frequented by Eastern Europeans, Russians and Americans.
Austria’s health care system was developed alongside other social welfare programmes by the social democrats in Vienna initially.
Trade with other EU countries accounts for almost 66% of Austrian imports and exports. Expanding trade and investment in the emerging markets of central and eastern Europe is a major element of Austrian economic activity. Trade with these countries accounts for almost 14% of Austrian imports and exports, and Austrian firms have sizable investments in and continue to move labour-intensive, low-tech production to these countries. Although the big investment boom has waned, Austria still has the potential to attract EU firms seeking convenient access to these developing markets.