14.1 Outlook for the global economy

The economic recovery lost momentum at the end of 2011. As a result, the robustness of the global economy will be closely scrutinised in 2012 and the risk of a downturn appears heightened in many countries. The prevailing uncertainty about what will happen is reflected above all in the variance between current economic forecasts. Two main trends can be observed: firstly the astonishingly strong data for the real economy in many countries and, secondly, significant political and economic imponderables. These relate primarily to the outcome of the euro crisis, further developments in the financial sector, unstable financial policy in the USA and the slackening pace of economic activity in the world's growth regions.

The economic risks are mirrored by the lower growth forecasts published in recent months and by the volatility of the financial markets. It is still not known how effective the additional consolidation measures taken by many industrialised countries will prove to be. Overall, there are signs that domestic demand will weaken in the advanced economies. The economic slowdown that has become apparent in recent months in the emerging markets, combined with declining momentum in the export sector, also point to a cooling off of the global economy. Commodity prices are also exhibiting a downward trend in line with general economic uncertainties and the falling level of global trade. Whereas prices for utilities that are not dependent on oil seem to be decreasing further, expectations regarding oil prices are less favourable due to the geopolitical situation.

On the basis of the aforementioned challenges and provided that no other uncertainties hold back the economy, the general assumption is that the global economy will grow at a slower pace in 2012 than it did last year. As long as economic conditions stabilise soon, experts anticipate that the European economy will stagnate this year, with France, Germany and the United Kingdom likely to have the better economic prospects among the western Europe countries. Based on the same assumptions, as well as recent developments, the outlook is more positive for the USA than for other large industrialised countries as US growth is forecast to stay at the same level. Demand in the emerging markets is likely to continue to normalise within a cyclical pattern, but at a high level, and will help bring relative stability to the world economy. In 2013, the economy is expected to pick up again.

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