Global economy
At the beginning of 2007, the global economy continued to see solid growth. However, several different trends were at play here: While economic growth again picked up pace in certain regions, the rate of growth in others was only moderate.

In the United States, growth was again weak as in the second half of 2006. Moderate investments above all had a dampening effect, whereas consumer demand continued its strong expansion. Despite muted economic growth, inflationary pressures did not yet subside noticeably. The US Federal Reserve held its key rate steady in this tense environment.

Japan’s economy continued to grow robustly, with corporate investments and international trade remaining dynamic. Due to the positive performance of the economy, the Bank of Japan raised its key rate by 0.25% to 0.5% in February, although the inflation rate fell below the zero mark again. China continued to lead the pack with its already very strong GDP growth accelerating further.

In the euro zone, the upswing at the beginning of 2007 held at virtually the same pace as before. In order to avoid the resulting inflation risks, the European Central Bank increased its key rate again by 0.25% to 3.75% in March.

There are significant signs that the upturn in Germany has also continued into early 2007. The ifo business climate index has held at a very high level in recent months, indicating that the value-added tax increase has only braked the economy slightly, if at all.