Vienna - Austria's economy will shrink by up to 0.5 per cent in 2009, economists predicted Friday, as the global economic downturn leads to lower exports.

The WIFO institute lowered its projection to a contraction of 0.5 per cent, while researchers at the IHS institute expect a decrease by 0.1 per cent.

In October, the independent institutes had predicted growth rates between 0.9 and 1.2 per cent.

WIFO and IHS both forecast growth of 1.8 per cent this year, a downward revision by 0.2 percentage points, as the economy is expected to contract slightly in the fourth quarter.

As a small country that depends heavily on exports, Austria would not be able to elude the global downward trend, WIFO said in a statement.

"Incoming orders - especially foreign ones - are plummeting, and consumption, which expanded only slightly in recent years, is slowing down more and more," it said.

In 2007, the Austrian economy grew by 3.1 per cent. (dpa)