At the start of the year, the global economy remained on course for growth. However, whilst vigorous activity was sustained primarily in the emerging markets, the US economy continued to falter.

Private consumption in the United States was hampered by high oil prices and the housing market crisis. Growing fears of a recession and the weakness of the financial system caused the US Federal Reserve to cut its key interest rate four times by a total of 2.25 percentage points to 2%.

The solid upsurge in Asia continued. After a strong final quarter in 2007, however, Japanese economic output has undoubtedly been growing much more slowly since the start of this year. Although the growth in China’s GDP slowed a little in the first quarter, it remained very high at 10.6% compared with last year.

The data available thus far indicate that the euro zone has maintained its moderate growth despite the strong euro and the international financial crisis. Even though the economic risks have increased, the European Central Bank held its key interest rate steady at 4%.

In Germany, industry and foreign trade in particular have been developing well. Domestic demand for capital goods has also remained high. The overall robustness of the German economy is corroborated by the ifo Business Climate Index, which continues to be at a high level.