Development of the overall economic environment and the associated impact

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, interest rate cuts by central banks, and declining inflation. Nevertheless, growth in private consumption remained restrained in many countries.

Uncertainty over the global economic outlook remains high. In particular, ongoing high geopolitical tensions constitute a significant risk factor. 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.

Deutsche Telekom is aware that, in view of the current developments, it is only possible to extrapolate past experience to the future to a limited extent. Deutsche Telekom continues to address these challenges and considers them in its business decisions in the course of developing measures to mitigate the risks. For instance, interest rate risks are still countered by keeping the variable-interest debt portfolio at a low level. With respect to energy supply, Deutsche Telekom’s national companies pursue different procurement strategies, e.g., by concluding power purchase agreements, to balance long-term supply reliability and appropriate prices.

For further information on risk mitigation measures, please refer to the section “Risk and opportunity management” in the combined management report.

Deutsche Telekom also considers the development of the economic environment in its consolidated financial statements and financial reporting, e.g., when determining the impairment of goodwill, the recognition of deferred taxes, and the measurement of provisions and financial instruments.