Economic uncertainty is at an extremely high level. Although the world economy has so far remained solid, global growth is likely to weaken in 2008 due to ongoing tension in the financial markets and the high oil price. The IMF has once again reduced its forecast, this time from 4.1% to 3.7%.

Economic growth in the United States will remain weak during the first half of the year. As opinions vary on whether the country is undergoing a marked slowdown in growth or is already in recession, the current range of GDP forecasts for 2008 is unusually broad. The IMF is now expecting growth of just 0.5% (Postbank Research: 2.2%).

GDP growth in Japan is likely to slow slightly in 2008. Current forecasts for the pace of expansion range between 1.4% (IMF) and 1.8% (PB Research). There are no signs that China’s rapid economic growth will slow appreciably.

The upturn in the euro zone should continue at a slower pace. GDP growth forecasts range between 1.4% (IMF) and 2.0% (PB Research). Growth will be driven by domestic demand, whilst exports will likely cease to provide impetus.

The German economy will also continue to expand in 2008 but fail to reach the high level of growth recorded in 2007. GDP growth forecasts range from 1.4% (IMF), to 1.7% (German federal government), to 2.1% (PB Research). Although foreign demand will continue to increase, it will be kept in check by the strong euro. Investment should grow at a slower pace than in 2007. Private consumption, on the other hand, is likely to pick up due to rising employment and income growth.