Austria's GDP contracted by 1.1% in real terms year-on-year in Q2, the first quarterly economic contraction out of the past eight quarters, according to new data from Statistics Austria.

The contraction between April and June was predominantly due to weak performances within the trade and industry sectors, which fell by a respective 6.7% and 2% year-on-year, the institution stated.

Austria's economic growth has weakened since the second half of last year, and the country's economy "weakens and shrinks in spring 2023 for the first time in eight quarters," said Statistics Austria's Director General, Tobias Thomas.

"This can mainly be attributed to the declining economic performance of trade and industry. Nevertheless, Austria's economy is 3.2% above the Corona pre-crisis level," he went on to say.

Although inflation in Austria gradually fell to 7.5% last month from a high of more than 10% at the end of 2022, it remained high in comparison to other countries within the eurozone, Statistics Austria went on to add.

In addition, at the end of last week, the Austrian Institute of Economic Research (WIFO) reported an ongoing decline in business assessments of the country's economy. Indeed, the Business Climate Index fell to -8.9 points last month from -5.2 points in July, according to the findings.

"Assessments of the current situation declined across all sectors and were deeply in negative territory, especially in manufacturing," according to a statement by the institute. "Economic expectations also deteriorated further, signalling a pessimistic economic outlook," the report continued.