Macroeconomic development

Following a strong start to the year, the global economy lost momentum in summer 2023. The International Monetary Fund (IMF) puts the global growth rate in 2023 at 3.1 %, down from 3.5 % in 2022. This slowdown is largely due to the flagging recovery from the coronavirus pandemic, Russia’s war against Ukraine, and tighter monetary policy and financial framework conditions. A further adverse factor is the restrained economic development in China caused mainly by debt in the nation’s real estate sector. The tighter monetary policy and declining commodity prices dampened the buoyancy of consumer prices in the United States and the eurozone in the reporting year.

There were contrasting trends in the economies in our core markets in the reporting year. In the United States, the economic situation developed better than had been anticipated at the start of the year. There was a marked increase in both consumer spending and capital investments, the latter most likely due in part to the recent introduction of subsidies in the semiconductor industry and in the area of transformation technologies.

By contrast, the European economy stagnated with a weak outlook. The industrial sector in particular suffered from rising interest rates, weak global demand, and diminished price competitiveness caused by the appreciation of the euro. This also resulted in more companies filing for insolvency in 2023. In the construction industry, demand for construction services has dropped markedly due to significantly worse financing conditions and sharp rises in construction costs. Consumer spending was also a weak point for the economy. Economic output declined in our European core countries of Germany, Hungary, the Czech Republic, and Austria in 2023, while the remaining core countries of Greece, Romania, Poland, Croatia, and Slovakia posted positive economic growth, benefiting in part from the EU’s Recovery and Resilience Facility. The magazine “The Economist” rated Greece the top-performing economy of 2023. The IMF also praised the Greek economy’s positive development, highlighting the country’s progress with the digital transformation.

In Germany, the Bitkom-ifo-Digitalindex, calculated on the basis of the business situation and expectations, decreased over the course of the reporting year. The business climate in the IT and telecommunication sector stood at plus 9.8 points in December 2023. The ICT industry thus remains at a significantly higher level than the economy as a whole: the ifo-Geschäftsklima Deutschland indicator was at minus 11.2 points in December 2023.

Cooling inflation and falling prices on the global energy markets could lead to moderate economic recovery in the coming year. Progress with the digital transformation and new trends in artificial intelligence could stimulate growth in productivity in the medium term. However, significant downside risks continue to weigh on the economic outlook.

For further information about the risks and opportunities relating to the macroeconomic environment, please refer to the section “Risk and opportunity management.”

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