Foreign Trade and the Balance of Payments

Like any small country, Austria depends heavily on foreign trade. Its central location in Europe reinforces that dependency and gives Austria a wide range of trading partners in both Eastern Europe and Western Europe. Austria also consistently seeks to avoid isolation and has joined international trading systems to ensure markets for its products and access to the goods it needs.

As the economy has evolved and produced a more sophisticated range of products, foreign trade has become more important. Foreign trade made up about one-fourth of GDP in 1955, one-third by 1975, and two-fifths by 1990. Austria's export structure has also evolved. One-half the country's exports were once raw materials, foods, and semifinished goods, but by the early 1990s two-thirds of its exports were finished products. Imports have came to reflect this change and consist mostly of industrial and semifinished goods that require further processing and finishing. The largest category of exports in 1991 was machinery and equipment, accounting for almost one-third of all exports. Other major items included chemical products, paper and paper products, transportation equipment, metal manufactures, and textiles and clothing. The largest single import item was also machinery and equipment; other items were manufactured products, chemical products, fuels and energy, and petroleum.

Distribution of Trade, 1970, 1980, and 1990

Austria's main trading partners are in continental Europe, especially Germany, Italy, and Switzerland. Because of a heavy dependency on imports, Austria usually has a negative trade balance, which is compensated for by positive services and capital accounts. Income from tourism is especially important in reducing the negative trade balance. The trade balance deteriorated particularly during the 1970s because of increased oil prices, and Austria had to make special efforts during the 1980s to redress the balance.

Balance of Payments, 1989 and 1991