Modest Recovery in a Risky Global Environment

The world economy regained momentum in the course of 2013. The slow recovery in eco-nomic activity in the Eurozone will continue and in the USA the economy will pick up speed. The emerging nations have benefited from the reduced political and economic un-certainty in the industrialised countries but unsolved issues of political governance and structural problems have weakened their own growth drivers considerably. With the global economy buoyant, last year also saw the beginnings of economic recovery in Germany, where real GDP is set to grow by more than 1 ¾ per cent in 2014 and by almost 2 per cent next year. This upswing affects all business sectors and is driven by both consumption and investment. Despite a positive trend in exports, foreign trade will contribute little to growth. Employment will continue to expand in Germany with a total of some 640,000 additional jobs being created in 2014 and 2015. However, unemployment will decline by a mere 130,000 to an annual average of something over 2.8 million in 2015. Despite higher government spending, the public sector will achieve modest budget surpluses this year and next. This forecast is based on the assumption that neither the problems with the financial markets and sovereign debt in Europe nor the political situation in a number of emerging countries create major uncertainties or additional burdens.