Household consumption, the most significant GDP category, contracted three per cent. Gross investment in fixed capital dropped 2.3%, while government spending went up 0.3%.
Household consumption declined because of unfavourable trends on the labour market and declines in real salaries and available income, Raiffeisenbank Austria analysts said regarding the statistics, adding that investment in fixed capital declined for the 17th consecutive quarter.
The only positive contribution to the real GDP year-on-year decline was the 0.8 per cent growth in net foreign demand. The export decline rate in Q1 was 4.9%, while imports declined 5.6%.
The real Gross Added Value in Q1 2013 declined 0.8% on the year, with the biggest negative contribution coming from the construction sector, which had been declining for four consecutive years, including a 4.3% drop in Q1.
Raiffeisenbank Austria analysts predict that the economy in 2013 will contract 0.5% on the year, but expect improvements in the second half of the year thanks to tourism, more investments and the realisation of some delayed projects.
Analysts said the positive impact of European Union cohesion and structural funds could be expected only in the years ahead, depending on project preparedness.