Overall economic development

Global economy continues to grow but is subject to ongoing risks

According to IMF predictions, the global economy will ­continue to grow in 2016, though risks continue. After 3.4 % in 2014 and 3.1 % in 2015, growth of 3.6 % is forecast for the coming year. Both the developed economies and the emerging markets will contribute to this. The latter in particular were confronted with a combination of adverse factors in 2015. They experienced geopolitical tensions, reduced capital flows and stricter financing conditions in some cases. As the heavyweight of this group of countries, China was a primary talking point due to its reduced growth dynamics, which led to additional negative effects across national borders.

Lower raw material prices caused significant impacts. While countries rich in raw materials suffered as a result, the economic development of countries dependent on raw material imports benefited.

The following influences will significantly shape the overall situation in 2016:

The new five-year plan in China for the period 2016 to 2020 does not include a growth target. Nevertheless, the Chinese president doesn’t predict that the country’s economic growth will decrease in the next few years, estimating an annual growth rate of at least 6.5 %. Foreign economic experts are more cautious regarding the expected GDP growth, however. The IMF forecasts only 6.3 % growth for China. Nevertheless, when it comes to the overall view of the emerging and developing countries, the IMF believes the return to 4.5 % economic growth is possible, which indicates a certain normalization in the conditions in some countries and positive influences from the improved development in industrialized countries. Especially low-income countries and countries dependent on raw material exports are still subject to specific risks, however.

Among the highly developed countries, the IMF believes that the recovery in the US is likely to continue. The situation benefits from low energy prices, strong company balance sheets and a further recovery in the construction sector. This should more than compensate for the strains from the firm US dollar. Economic growth in the US is therefore forecast at 2.8 % in 2016.

The improvement tendencies in Japan could continue. ­Economic growth is expected to be 1 % in 2016.

The moderate recovery in the Eurozone will likely continue, supported by low raw material prices, loose fiscal policy and a low euro, which promotes exports. However, growth will continue to be limited by individual regional developments within the currency area and other factors such as demographic trends. Overall, the IMF forecasts 1.6 % growth in the Eurozone for 2016 following 1.5 % in 2015. Germany is at the same level with plus 1.6 % compared to the previous year. France and Italy are slightly lower with plus 1.5 % and 1.3 %, respectively. Outside of the Eurozone, the forecast for the United Kingdom indicates above-average growth of plus 2.2 %.