Future economic parameters

Economic upturn with risks

The global economy is likely to maintain its growth course in 2012 but there are considerable risks. Sharply rising commodity prices may cause inflation to increase appreciably, especially in emerging markets, and may significantly slow the upturn. The national debt crisis in the euro zone in particular may have a highly adverse effect on international financial markets. If these risks remain manageable, the International Monetary Fund (IMF) expects an increase in global economic output of 3.3%. At the start of the year, most institutes were still giving relatively conservative estimates of growth in global trade (IMF: 3.8%, OECD: 4.8%).

In China, the government is making efforts to keep inflation under control and to slow down the economy. The economy is therefore expected to grow somewhat more slowly (IMF: 8.2%).

The Japanese economy may be able to recover from the economic downturn. Exports are forecast to increase considerably and gross fixed capital formation will also likely see a strong rise on account of the rebuilding efforts after the earthquake. A rise in private consumption is anticipated. GDP is therefore expected to grow (IMF: 1.7%, OECD: 2.0%, Postbank Research: 2.1%).

In the United States, the economy is projected to revive but not to gain any significant momentum. Investments in machinery and equipment as well as construction spending are expected to increase. The surplus on the housing market, however, is likely to curb the upwards trend. Private consumption will probably rise moderately, reflecting the slight decline in unemployment. Foreign trade and government spending is not expected to provide stimulus. Forecasts call for GDP growth to accelerate slightly overall (IMF: 1.8%, OECD: 2.0%, Postbank Research: 2.4%).

The euro zone economy is expected to experience a profound weak phase. To combat the national debt crisis, spending will be cut and taxes increased, which will likely also slow private consumption and gross fixed capital formation. As a result of weak domestic demand, imports are likely to rise at a considerably slower pace than exports so that foreign trade may have a positive impact on growth. However, total GDP is likely to increase only marginally (ECB: 0.3%, Postbank Research: 0.6%). A decline in economic output cannot be ruled out. The vast discrepancies between the member states are likely to remain.

This development will probably slow the German economy noticeably, an effect that will be seen mostly in exports. Investments in machinery and equipment as well as construction spending are expected to increase but not by as much as in 2011. Annual average employment figures are forecast to rise considerably, which is likely to boost private consumption further. However, GDP is expected to record only weak to moderate growth (Sachverständigenrat: 0.9%, Postbank Research: 1.2%).

If the global economy grows, the demand for crude oil will increase. The supply will probably be expanded as this occurs and, as a result, crude oil prices are likely to see only a moderate average increase in 2012.

The US Federal Reserve has announced that it will keep its key interest rate at a very low level for a longer period of time. A consistent rate between 0% and 0.25% can therefore be expected for 2012. The ECB will probably keep its key interest rate at 1.0%. Nevertheless, capital market interest rates may rise, although a weak economy and low key interest rates are likely to keep yield spreads tight.