Macroeconomic Development

General Conditions

In Germany, the solid growth of the previous year also continued in the year under review. According to the German Federal Statistical Office, gross domestic product (GDP) grew by 1.9% compared to 2015 and thus exceeded the forecast of 1.7% issued by the International Monetary Fund (IMF) in January 2016. Positive momentum came from within Germany as well as from abroad. Consumers and especially the government increased their spending. Private investment rose as well, particularly in the construction industry. On balance, foreign trade also had a positive effect on GDP growth, as exports rose faster than imports.

According to the IMF’s current estimate, the economy in the eurozone grew by 1.7% in 2016, performing in line with the IMF’s forecast of January 2016. Most countries recorded an increase in consumer and government spending and in private investment. Economic development was supported by the monetary policy of the European Central Bank (ECB), which stepped up its expansive measures again in March 2016.

In the U.S.A., GDP growth initially decelerated in the first half of 2016. Growth was curbed primarily by declining private investment. However, economic activity picked up pace again significantly in the second half of the year. Private investment and exports increased noticeably. With a 1.6% rise in GDP in the year under review, the U.S.A. fell short of the 2.6% forecast by the IMF in January 2016 on the whole. The U.S. Federal Reserve (Fed) acted cautiously over the course of the year, waiting until December 2016 to hike up interest rates by 25 basis points for the second time. GDP growth in Japan was curbed by the appreciation of the Japanese yen in the year under review. GDP was boosted by increased public spending and a slight upturn in consumer spending. Overall, the Japanese economy may have grown 0.9% year-on-year in 2016 based on current expectations, partly due to the very expansive monetary policy of its central bank. The growth would therefore have been somewhat weaker than the 1.0% forecast by the IMF at the start of the year.

According to the IMF’s WEO update (World Economic Outlook, WEO) from January 2017, emerging and developing economies recorded growth totaling 4.1% in the year under review, the same as in the previous year. As in previous years, China and India were the main growth drivers. With a reported increase in GDP of 6.7%, the Chinese economy performed better than the IMF’s forecast of 6.3% at the start of 2016. By contrast, the IMF reports that India’s GDP increase of 6.6% fell well short of the forecast of 7.5% made at the start of the year. This was due to the Indian government’s cash reform in November 2016, which had a significant negative impact on consumer spending in the fourth quarter. The Russian economy stabilized over the course of 2016 thanks to the recovery of the price of crude oil and other raw materials, contracting by only 0.6% according to preliminary estimates after 3.7% in the previous year. As expected, however, the Brazilian economy remained in recession in 2016 with a 3.5% decline in GDP on the basis of preliminary data.

In January 2016, the IMF had forecast a 3.4% expansion in the global economy for the year under review. However, the IMF’s January 2017 WEO Update indicates that the lower growth rates in the U.S.A. and several other countries caused global economic growth to slow to 3.1% in 2016 after 3.2% in the previous year.

Year-on-year economic growth (GDP) in 2016

Year-on-year economic growth (GDP) in 2016