Economic Parameters

Global economy continues to recover

Overall, the global economy continued on its recovery path in the first quarter of 2010, although there were regional differences. The resurgence in Asia’s emerging economies remained especially dynamic. In the industrial nations, the economic situation improved rapidly in some but stagnated in others.

Growth in Asian countries continued to accelerate. GDP in China grew year-on-year in the first quarter, rising by 11.7%. In Japan, GDP is also expected to have further expanded in early 2010 thanks to rising exports.

In the United States, the economy continued to regain speed. It is likely that private consumption and business investment increased. Moreover, employment rose moderately for the first time in many months. Nonetheless, unemployment levels remained very high and overall capacity utilisation was very low. The US Federal Reserve kept its key interest rate at 0% to 0.25% in a continued effort to boost the economy.

After its recent stagnant economic output, the euro zone most likely grew slowly again at the beginning of 2010. Consumer spending remained subdued given the rise in unemployment. Furthermore, it is likely that gross fixed capital formation was down once again. Given that the economy only experienced a weak recovery and that inflation remained very low, the European Central Bank held its key rate at 1%.

At the beginning of the year, the German economy was impaired by the uncharacteristically harsh weather conditions. Due to the considerable drop in construction spending, GDP is expected to have only stagnated in the first quarter. However, the upward economic trend continued. The industrial sector reported a strong influx of new orders and the unemployment rate fell further (seasonally adjusted). The sustained recovery was also reflected in the Ifo Business Climate Index, which reached its highest level since mid-2008.