Macroeconomic development

Russia’s war against Ukraine slowed growth in all regions, drove up inflation, and intensified shortages in individual markets right from the start of 2022. Extensive sanctions were imposed on Russia in response to its aggression. Dwindling gas deliveries from Russia pushed up energy prices. High inflation has prompted the U.S. Federal Reserve, the European Central Bank, and other central banks to take determined action to tighten monetary policy. Consumer confidence fell significantly over the course of the reporting year. The manufacturing industry suffered supply chain disruptions and rising wholesale costs in 2022. Repeated lockdowns in China until December 2022 as a consequence of the nation’s strict Covid strategy continued to impact on economic activity.

The International Monetary Fund (IMF) projects a 3.4 % increase in world economic output for 2022, 1 percentage point less than forecast in the prior year. Economic growth also slowed substantially in our core markets in 2022. In Germany, although gross domestic product (GDP) increased by 1.8 % year-on-year, it was down 0.2 % in the fourth quarter of 2022 against the previous quarter. A technical recession is expected for the latter part of 2022/early part of 2023. The harmonized index of consumer prices increased by 8.7 % in 2022, with energy and food prices recording particularly notable increases. The European Central Bank countered this development by raising its benchmark interest rates four times in 2022.

The Bitkom-ifo-Digitalindex, calculated on the basis of the business situation and expectations, declined over the course of the reporting year but recovered towards the year-end. The current business situation of IT and telecommunications companies was clearly positive in January 2023 at 36.4 points, demonstrating the high resilience of the digital economy in the current crisis. In the digital sector, too, the business outlook brightened in January 2023 for the first time since summer 2022.

The U.S. economy also cooled off noticeably over the course of 2022. Growth sank from 5.9 % in 2021 to 2.0 % in 2022. The shrinking disposable income of private households pushed down consumer demand. Higher interest rates also had a considerable impact on spending, especially on real estate investments. The U.S. Federal Reserve raised its federal funds rate in seven steps in 2022. Inflation calculated on the basis of the consumer price index peaked in June 2022 at 9.1 %, falling back to 6.5 % in December 2022.

The majority of the economies of our Europe operating segment recorded higher growth in 2022 than the EU area as a whole, which recorded growth of 3.3 %. GDP growth in Greece, Poland, and Hungary stood between 4 % and 6 % in the reporting year. However, due to high inflation rates and some more restrictive financing conditions, this growth slowed markedly in the second half of 2022.

The following table shows the GDP growth rate trends and the change in harmonized consumer prices in our most important markets.