VIENNA--The European Union cut its 2014 and 2015 economic growth forecasts for Austria, but retained its 2016 forecast, after the country's economic growth turned negative in the third quarter. The Alpine country's economy is expected to have stagnated in 2014, with gross domestic product only growing 0.2%, the EU said Thursday in its winter 2015 forecasts. In its autumn forecast, the EU had seen Austrian 2014 GDP growth at 0.7%. The current year brings "no tangible acceleration of growth," and as such the Austrian economy is expected to only grow 0.8% in 2015, down from the EU's previous forecast of 1.2%, the EU said. While the EU retained its Austrian 2016 GDP growth forecast of 1.5%, it warned that the forecast depends on an increase in international trade as well as more investments and consumption in response to the low interest-rate environment. Austrian companies are ill-situated to profit from a recovery in the demand for exports as investments have been lukewarm of late. It added that domestic demand is expected to drive most of the GDP increase starting in 2016.

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