Austria to reach pre-crisis GDP level in 2013 -bank

VIENNA, June 15 (Reuters) - Austria's economy will need until 2013 to return to pre-crisis levels, the country's biggest bank said on Monday, when it presented the first rise in its economic indicator since March 2007.

Bank Austria, a unit of Italian bank UniCredit (CRDI.MI), said its economic indicator had risen to -2.5 in May, up from -2.9 in April, indicating that the Alpine economy was reaching the trough of the recession.

But it warned against getting too excited.

"The economic indicator is still at a very low level and clearly negative," Bank Austria economist Stefan Bruckbauer said in a statement. "The small rise in May merely shows that the downturn is slowing after the bad start of the year."

Bruckbauer said he expected gross domestic product to continue to decline in 2010, albeit only slightly, a similar projection to the Austrian central bank's. [ID:nL41035768]

"As the medium-term upswing will be only subdued, it will be only in four to five years that the Austrian economy will have reached the level of before the crisis," he said.

The rise of the indicator was helped by a boost to consumer confidence which Bank Austria credited to the fact that Austrians felt the impact of income tax cuts in their wallets from April, when tax reform meant to help the economy kicked in.

Business confidence was helped by a slower decline of order intake and favourable price trends, Bank Austria said.

Bank Austria's indicator is designed to predict the annualised change of gross domestic product over the next six months. Austria's GDP shrank by 2.6 percent in the first quarter, and Bank Austria said it expected it to decline by 0.5 percent in the second. [ID:nLA673564]

For the full year of 2009, the bank expects a 3.5 percent contraction, followed by a 0.3 percent decline in 2010. (Reporting by Boris Groendahl; editing by Stephen Nisbet)