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The official language in Austria is German. Austria is one of the three big German speaking countries – the other two are Austria’s western neighbours, Germany and Switzerland. Besides these three countries, German is spoken is several other countries as native language – these are either very small countries (Liechtenstein) or big countries with German speaking minorities (e.g. Italy or Belgium).
There are many differences between German and Austrian German, but these differences are generally just particular words. Grammar and overall logic of the language are the same and if you understand German, you will definitely understand (and be understood) in Austria.
There is a specific dialect spoken in Vienna, called Viennese German or (in German) Wienerisch. Some of its features are unknown even to people in the neighbouring Lower Austria. The differences from mainstream German and Austrian German are mostly in pronunciation and there are also some specific words. Anyway, Viennese German should not be a major obstacle in comprehension for a German speaking foreigner.
There are other dialects used in other regions in Austria; the most different is probably the language spoken in Vorarlberg which is similar to Swiss German.
Though it is not such a sure thing as in the Scandinavian countries, most people in Austria understand English at least to some extent. Children generally learn English at school from an early age and for most of them it is the primary foreign language. Nevertheless, sometimes you might meet older people who can’t speak English.
You won’t have any problems using English in any tourism related place, like major attractions, hotels, and restaurants, where the staff speak English fluently in most cases. The signs and written information are often stated in two languages – German and English.
English is the number one foreign language Austrians learn and speak, but you may come across people who understand at least basic Spanish, French, or Italian too. However the prevalence of these languages is much lower among Austrian population compared to the prevalence of English. While not that much spread in Vienna, Italian is widely spoken in the southern regions of Austria (Styria, Carinthia, and Tyrol).
Thanks to the physical and cultural proximity and historic developments (Austro-Hungarian Empire or people escaping the communist countries in the second half of the 20th century) many Viennese inhabitants have Czech, Slovak, or Hungarian origin. Some of them still understand the language of their ancestors, but you should not rely on this. Being able to communicate with the locals in Czech or Hungarian is rather an exception. Nevertheless, these languages (and mainly Czech) have influenced Viennese German to some extent.
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