Macroeconomic parameters

Global economy

For financial year 2019/20, we expect global economic growth to develop at a similar level as in reporting year 2018/19. Consumption remains a positive growth driver, while industrial production in Europe remains at a similar level as in financial year 2018/19. The development of trade conflicts will potentially have a major impact on the global economy. The US trade dispute with China and the EU, as well as Brexit, must be mentioned explicitly in this context. Overall, we expect inflation-adjusted global economic growth of approximately 3.1% for 2020.

Germany

With real economic growth of +0.7%, the outlook for the development of the German economy in financial year 2019/20 is similar to that of the reporting year. Only slight growth is expected for exports and industrial production. According to the outlook, private consumption will grow just above the continued low inflation rate and thus acts as a growth driver. The situation in the labour market is expected to remain positive despite possible short-time work measures in some industrial companies. However, the development will depend on the outcome of the negotiations regarding Britain’s withdrawal from the EU, which is currently expected to take place at the beginning of 2020.

Western Europe

For financial year 2019/20, growth is expected to be similar (1.2%) to that of the past financial year. Overall, a virtually unchanged low development is forecast. In Italy, the economy is stagnating and the fiscal deficit is also expected to expand under the new government. In France and Spain, economic development remains relatively stable at a low level. The monetary policy of the European Central Bank (ECB) is expected to be similar to that of the previous year, that is, interest rates are expected to rise only very slightly or even be negative in the short term. The effects of Brexit on individual countries and an escalating trade conflict with the USA remain unclear. Both developments pose great risks for exports, which are a growth driver for Europe.

Russia

For Russia, economic growth is expected to improve slightly compared to financial year 2018/19, but still to be low overall, at approximately 1.49%. This is accompanied by a slight decline in private consumption, which will also be affected by a VAT increase and pension reforms. By contrast, inflation is expected to be below the previous year’s rate at a total of 3.3%. A stabilised level for the currency is forecast. Nevertheless, sanctions continue to contribute to the drain on the economy.

Eastern Europe

For the economy in Eastern Europe, we again expect growth to be slightly lower than in the previous year, but still clearly positive. This trend can be seen in almost all countries in this region. The economic situation in Turkey is slowly recovering and growth is therefore expected to be stronger than in the previous year. Private consumption in many countries is growing less strongly than in the previous year, but remains at a positive level overall and continues to drive economic growth. The outlook for inflation vary from country to country. In Poland, the rate is rising more strongly than in the previous year; in Turkey and the Ukraine the rates are falling, but remain at a high level overall. In the Eastern European countries, the labour market situation remains very good or is developing positively, for example in Serbia and Turkey. The currencies remain relatively stable against the euro.

Asia

The Asian economy continues to grow steadily at a similar level as in financial year 2018/19. The labour market and private consumption continue to develop very positively, even as the inflation rate continues to rise slightly. For China, economic growth is forecast to turn out below the level of the previous year, carrying the risk that the trade conflict with the USA will intensify again. The Indian economy continues to grow strongly according to forcasts, driven by private consumption, rising exports and low unemployment.