Vienna  - Austria's economy is expected to grow at an average 2.3 per cent yearly through 2012, less than previously expected, because of the US slowdown, forecasters said Tuesday.

The Institute for Economic Research (WIFO), an independent research group, lowered its forecast from last year's prediction of 2.5 per cent annual growth for the period.

The present downturn of the US business cycle will continue to weigh on activity in the euro area in the second half of 2008 and throughout 2009, the Vienna-based institute said.

"Based on the US, we had to lower our short-term prognoses. And that affects mid-term trends," study co-author Ewald Walterskirchen told Deutsche Presse-Agentur dpa.

WIFO said the downward trend would be partially offset by growth in CEE countries, where Austrian exporters have a strong market position.

The institute expects the euro area to recover starting from 2010. (dpa)