1. This statement provides information that has become available since the Staff Report (SM/12/207) was circulated to the Executive Board on August 2, 2012. The information does not alter the thrust of the staff appraisal.
2. Revised data shows somewhat stronger GDP growth in the first quarter of 2012, while preliminary data confirms the expected deceleration in the second quarter. Together with their Q2 flash release, the Austrian authorities have revised their quarterly GDP series. Growth in 2012Q1 was revised upwards from 0.3 percent (qoq) to 0.5 percent (qoq). The Q2 flash estimate shows a deceleration to 0.2 percent (qoq), mainly due to a reduction of the external growth contribution to zero, but also somewhat weaker domestic consumption. Looking forward, the weak external environment suggests that the deceleration in economic activity will continue in the second half of the year and may even be stronger than originally envisaged. All in all, annual growth for this year is likely to be somewhat higher than the 0.8 percent in the staff report. However, growth prospects for 2013 may have worsened, given the overall external environment. The inflation reading in July was 2.1 percent (down from 2.2 percent in June).