Economic Parameters

Global upturn stabilised

The global economy continued on its upward path when starting into the second half of 2010, albeit with less momentum than in the first half of the year. Asia’s emerging economies again demonstrated robust growth. However, most industrial nations are also expected to have increased economic output.

GDP in China grew by 9.6% during the third quarter. In Japan, the surge in exports has recently waned, which suggests that third quarter GDP growth will be relatively subdued in comparison with the previous quarters.

The US economy again saw only moderate growth in the third quarter. It was boosted by further increases in corporate investments. In addition, private consumption showed solid growth, although persistently high unemployment slowed the trend. The US Federal Reserve retained its key interest rate at 0% to 0.25% in a continued effort to prop up the economy.

The upswing in the euro zone accelerated noticeably in the second quarter of 2010 thanks primarily to the strong growth in industrial production. Investments and exports were also up sharply and even private consumption saw a moderate rise. Whilst the economy strengthened considerably in some countries, it remained weak in several of the southern member states. The economic recovery has likely continued in the third quarter, although with a clear loss in momentum. The European Central Bank held its key interest rate at 1% to further sustain the economy, with inflation remaining moderate.

Germany has led the economic recovery in the euro zone over the course of the year. Second-quarter GDP grew 2.2% compared with the previous quarter, a rate not seen in Germany since reunification. An extremely sharp rise in exports, gross fixed capital formation and private consumer spending contributed to this expansion. Although Germany is also likely to see a slower rate of growth in the third quarter, the economic outlook remains positive. The Ifo Business Climate Index recently returned to its previous strong upward trend.