Forecast for the Global Economy

Global economy starts moving
At the beginning of fiscal year 2004, it is not clear whether the positive signals can be interpreted as the start of a sustained, strong recovery of the global economy. However, the prevailing conditions for a worldwide economic recovery are more favorable than they were 12 months ago.

According to a forecast by the World Bank made in September 2003, the global economy will grow 3.0% in 2004, measured in GDP terms. In the United States, there are indications of positive development at the beginning of 2004 – characterized by growing incoming orders, production, and export. The World Bank estimates that U.S. real GDP will grow 3.4% in 2004. Growth forecasts for the Japanese economy vary between 1.3% (World Bank) and 1.8% (OECD). In the euro zone, it is estimated that the economy will grow noticeably stronger in 2004 but economic dynamics will nevertheless remain subdued. The World Bank predicts that GDP will rise 2.0% while the OECD foresees growth of 1.8%. In their expert report published in the fall of 2003, the six leading German institutes for economic research predicted 1.7% GDP growth for Germany in 2004. Whether this growth will materialize depends on companies’ willingness to invest, tax policy, and the strength of the euro against the U.S. dollar.