Can Austria’s ETF Stay Ahead of Dire Forecasts?

 |  About: iShares MSCI Austria Capped ETF (EWO)
by: Tom Lydon

Not all countries are going to roar back to recovery. Austria’s economy, along with its related ETF, may languish for a while until demand for Austrian exports once again resumes.

What’s got Austria in such a funk?

  • The Central Bank expected an overall 4.2% GDP contraction this year followed by another 0.4% in 2010 because of poor exports and investments. Germany, which usually takes in around a third of Austria’s exports, has not been faring too well.
  • The Austrian Higher Study and Economic Research Institute recently noted that the unemployment rate in Austria could reach a record 8.8% in 2010 as the country’s economy remains relatively weak, China View states. Unemployment is currently around 7.7%, up from 5.8% in 2008.
  • The institute goes so far as to claim Austria is in such a rut that it will take until 2013 for a recovery. The director of the institute thinks the economy will hover around a 0.5% to 1% gain in 2010. The institute forecasts a low inflation rate of 1.4% by 2013.
  • iShares MSCI Austria Investable Mkt Idx (EWO): up 43.5% year-to-date


Max Chen contributed to this article.