Vienna  - Austria's central bank Monday lowered its predictions for economic growth in 2008 and 2009, largely as a result of the global financial crisis and high commodity prices.

In a report, the bank forecast real GDP to grow 2.2 per cent in 2008, down 0.3 per cent from its December 2007 prediction. GDP growth in 2009 is seen at 1.7 per cent, a downward revision of 0.6 percent.

Austria's GDP expanded by 3.4 per cent in 2007.

Although strong German growth buoyed economies in the Euro group in the first quarter of 2008, the international financial crisis, the economic downturn in the US and prices for raw materials would affect Europe, the central bank said.

"After an excellent start into the year 2008, the outlook for Austrian economic growth will turn noticeably dimmer," Josef Christl, executive director of the Oesterreichische Nationalbank, said.

High commodity prices would also push inflation to 3.1 per cent in 2008, up from 2.2 per cent in the previous year.

Inflation will slow down in the following two years to 2.4 per cent in 2009 and 1.9 per cent in 2010, the bank predicted.

Austrian exports are expected to grow 6.4 per cent this year, down from 8.4 per cent in 2007. Austria's focus on Eastern European markets, a diversified economy and competitive labour costs prevented an even bigger slowdown, the bank said. (dpa)