After the strong expansion in the first half of 2022, the Austrian economy is now in a downturn phase. The economic slowdown is spreading to all value adding sectors; the manufacturing sector is even likely to slip into recession. Real GDP is expected to grow by 4.8 percent in 2022 and roughly stagnate in the following year (2023 +0.2 percent). With inflation remaining high in 2023, Austria's economy is heading for stagflation for the first time since the 1970s.