Development of the economic environment and impact on financial reports

The macroeconomic challenges currently facing society, politics, and business are multi-faceted and often interdependent. The declining rate of inflation and anticipated benchmark interest rate reductions should lead to a moderate economic recovery in the current year. Nevertheless, significant downside risks continue to weigh on the economic outlook – in particular, the current geopolitical crises carry with them high risks for economic growth and inflation. Deutsche Telekom is aware that, in view of the current developments, extrapolating past experience to the future is only possible to a limited extent. Deutsche Telekom is constantly reassessing the challenges and takes them into account in its consolidated financial statements and financial reporting, e.g., when testing the impairment of goodwill, the recognition of deferred taxes, and the measurement of provisions and financial instruments.

Changes in the underlying parameters primarily relate to the exchange rates used for currency translation and to the interest rates for determining defined benefit obligations.

The euro exchange rates of certain significant currencies changed as follows:

The following key discount rates were used when calculating the present value of defined benefit obligations: