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Economic upswing continues to be moderate

Press release from the

Activity of the world economy has accelerated at the end of the previous year. Particularly, production has grown rapidly in advanced economies. The upswing of the US economy has further improved since last summer. Similarly, the recovery of the Euro area that had been expected in summer has materialized. In contrast, the Japanese economy has not fully overcome the recent downturn. Though benefiting from growing exports to advanced economies, the dynamics of emerging markets’ economies have not reached pre-crisis levels yet.

Economic policy is expected to facilitate the current upswing. While monetary policy is likely to remain expansionary, fiscal policy in advanced economics is expected to become less restrictive.

However, current disparities in economic dynamics in emerging and advanced economies will persist. In particular, advanced economies that have finalized their adjustment process in the aftermath of the financial crisis will benefit from improved conditions. In these economies, however, monetary policy will become more restrictive, which will start to dampen aggregate demand in the next year.

The Euro area is expected to further recover from the sovereign debt crisis. However, economic activity in European countries that have been hit by the crisis is likely to remain inhibited because structural adjustment has not been completed yet. Economic dynamics in emerging markets are expected to increase only slightly. Whereas these countries further benefit from an enhanced demand from advanced economies, factors which weaken economic conditions will persist.

Finally, production of the world economy (weighted by countries’ GDP share in terms of purchasing power parity) will rise by 3.4% this year and by 3.7% in the next year. This leads to an increase of international trade in goods by 4.0% (2014) and 5.3% (2015).

(published in „RWI Konjunkturberichte“, No. 1/2014)

Contact:       

Prof. Dr. Roland Döhrn, Tel.: 0049-201-8149-262, e-mail
Katharina Brach (press office), Tel.: 0049-201-8149-244, e-mail

Key Data of the Forecast from March 2014
2013 to 2015

 

2013

 		 

2014f

 		 

2015f

 
Gross Domestic Product1, change in %0,41,92,1
Employed persons2, in 1 00041 84142 18042 220
Unemployed3, in 1 0002 9502 8852 930
Unemployment rate3,4, in %6,96,76,7
Consumer prices, change in %1,51,21,6
Labor unit costs5, change in %2,11,31,4
Fiscal balance 6,
in billion Euro
in % of GDP
0,3
0,0
0
0,0
8
0,3
Current account balance7, in billion Euro201,0216224

RWI calculations based on data provided by the German Statistical Office, Deutsche Bundesbank, and the Federal Labor Office. - 1In real terms. - 2Domestic. - 3National definition. - 4In % of civilian labor force. - 5Compensation per employee divided by real GDP per employed person. -  6National Accounts definition. - 7Balance of payment definition. - fForecast.

Key Data of the International Forecast
2013 to 2015; changes over the previous year in %

 

2013

 		 

2014f

 		 

2015f

 
Gross Domestic Product1 

 

 		 

 

 		 

 

 
 

Euro area

 		-0,41,11,5
United Kingdom1,82,62,5
USA1,92,73,0
Japan1,61,41,4
Advanced Economies1,12,02,3
Consumer prices   
Euro area1,40,91,3
United Kingdom2,62,02,3
USA1,51,82,6
Japan0,42,01,7
Advanced Economies1,31,52,0
World Output2   
based on Purchasing Power Parities2,83,43,7
based on market exchange rates2,12,83,1
World trade32,04,05,3
Oil Price (Brent, US-Dollar/b)4108,2109,2111,5
Exchange Rate (US-Dollar/Euro)41,331,381,38

RWI calculations based on OECD, IMF, Eurostat and national data. - 1In constant prices. -2Weighted average of the countries forecasted in this report. -3Goods, in prices and exchange rates of 2005. - 4Annual averages.- fForecast.