Macroeconomic development
The global economy proved itself resilient in 2024, despite all the challenges. Unemployment remained low in historical terms. Household income was bolstered in real terms by strong nominal wage growth and declining inflation. Nevertheless, growth in private consumption remained restrained in many countries, owing to weak consumer confidence. The International Monetary Fund (IMF) estimates global growth for 2024 of 3.2 %, down from 3.3 % in the prior year. Underlying these growth figures is a global shift in demand from goods to services. This realignment is reviving the service sector in industrialized and emerging countries, while having a generally dampening effect on industrial production. The IMF views that success in combating inflation is a cause for optimism.
The U.S. economy performed robustly over the course of the reporting year, mostly buoyed by consumer and public spending and federally subsidized business investments. For 2024, GDP growth of 2.7 % is expected. After introducing the turnaround in interest rates in September 2024 by cutting its benchmark interest rates by 0.5 percentage points, the U.S. Federal Reserve (Fed) made two further cuts in early November and mid-December 2024, each of 0.25 percentage points.
After a lengthy period of stagnation, the European economy returned to moderate growth in the first quarter of 2024, which continued in the subsequent quarters, accompanied by further easing inflationary pressure. The European Central Bank (ECB) cut its key interest rates by a total of one percentage point in four steps in 2024. While economic output declined in our European core countries of Germany and Austria in 2024, our remaining core countries recorded positive economic growth. The German economy has been in a phase of stagnation for some time now, which can be attributed to both economic and structural problems, including declining competitiveness, high energy prices, and excessive bureaucracy. In our core countries of Greece, Croatia, Poland, and Slovakia, robust growth was driven in particular by consumer spending in 2024.
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 telecommunications sector stood at minus 5.3 points in December 2024. The ICT industry, however, remained at a significantly higher level than the economy as a whole: the ifo Business Climate Index for Germany was at minus 14.8 points in December 2024.
A broad-based revival in private consumption could lead to a moderate economic recovery in the year ahead. 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 on economic outlook, please refer to the section “Forecast.”
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.