Global economy slightly losing momentum
Economic uncertainty is unusually high. Turbulent financial markets, a weak US dollar and high oil prices have the potential to noticeably hamper global expansion. Leading economic institutions and organisations forecast for 2008 that global GDP will advance more slowly and global trade grow a little faster than in the previous year.
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Growth forecasts |
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2007 |
2008 | ||||||||||
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Global trade volume1) |
6.3 |
6.92) | ||||||||||
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Real gross domestic product |
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Global |
4.9 |
4.1 | ||||||||||
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Industrial nations |
2.6 |
1.8 | ||||||||||
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Emerging markets |
7.8 |
6.9 | ||||||||||
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Central and Eastern Europe |
5.5 |
4.6 | ||||||||||
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Former CIS states |
8.2 |
7.0 | ||||||||||
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Asia |
9.6 |
8.6 | ||||||||||
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Middle East |
6.0 |
5.9 | ||||||||||
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Latin America/Caribbean |
5.4 |
4.3 | ||||||||||
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Africa |
6.0 |
7.0 | ||||||||||
The US economy will continue to suffer from the decline in residential property investment. Although foreign trade is again expected to exert a positive influence, growth will probably be as moderate as it was in 2007, around 2.2%.
Buoyed by both external trade and domestic demand, the Japanese economy is likely to expand further. Growth of between 1.6% and 1.8% appears feasible. China also remains on course for additional growth. A GDP advance of around 10% is anticipated for 2008.
The euro zone will maintain its upswing but at a slower pace. Its economy will continue to be driven by domestic demand, however foreign trade will restrain growth in the euro zone slightly, especially because of the strong euro. At 2.0%, expansion in the euro zone will be slower than in 2007 overall (IMF: 1.6%, OECD: 1.9%, Postbank Research: 2.0%).
The German economy is likely to remain programmed for growth but lose some of its vigour. Thanks to a fall in unemployment, higher collective pay agreements and therefore elevated income, an appreciable invigoration of private consumption is anticipated. With GDP advancing by some 2%, the upswing in Germany is expected to be sustained (OECD: 1.8%, German Council of Economic Experts: 1.9%, Postbank Research: 2.1%).
It is anticipated that the situation in the oil market will ease slightly as 2008 unfolds.
In January 2008, the US Federal Reserve cut its key interest rate by an additional 1.25 percentage points to 3.0% because of the economic risks that exist in the USA but further decreases are to be expected only if the economy enters a recession.
Given the persistent uncertainty of the economic climate, the ECB is likely to hold its key interest rate for the time being.
