The deterioration in the fiscal position calls for committing soon to a credible medium-term consolidation strategy which should be implemented once the recovery is in train. Administrative reforms should be continued to facilitate consolidation efforts. Growth may prove stronger in the short term given the brisk improvement in the global economy. The risk of a financial crisis in Central and Eastern Europe has diminished, but rising non-performing loan ratios would put the Austrian banking sector under pressure, entailing a downside risk to fiscal projections.
©OECD Observer 2010