Last Update: 03/11/2010
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Part of the audited Consolidated Financial Statements and Management´s Analysis

Economic environment in 2010

For the year 2010, we expect the following economic conditions:

  • Recovery of the global economy; moderate rise in global gross domestic product (+2.7%)
  • Weak growth in the industrialized countries (+1.8%)
  • Weak growth in the European Union (+1.1%); growth in the United States (+2.6%); moderate growth in Japan (+1.3%)
  • Clear positive economic growth in Asia (excluding Japan) (+7.0%) and in South America (+3.7%)
  • An average exchange rate of $1.40 per euro
  • An average annual oil price of $75 per barrel

In the second half of 2008 and over the course of 2009, the global economy suffered its worst recession since the end of the Second World War. Leading indicators at the end of 2009 were increasingly suggesting that this slump has bottomed out. For 2010, we expect an average oil price of $75 per barrel, and an average exchange rate of $1.40 per euro. A recovery of the world economy and a moderate rise in global gross domestic product (+2.7%) will characterize the year. Government stimulus programs proved effective in 2009 and will be largely phased out in 2010. In the industrialized countries, economic growth for 2010 will still be weak (+1.8%). We expect a significant global recovery from 2011 onward. From 2012, we expect that the previous growth trend of over 3% can be achieved again.

Outlook for gross domestic product 2010
(Real change compared with previous year)

Outlook for Gross Domestic Product 2010 (bar chart)

Europe will continue to feel the effects of the financial crisis due to continued difficulties in obtaining credit, higher unemployment and low consumer spending. We forecast weak overall growth in 2010 (+1.1%). In comparison, the German economy will recover relatively well (+1.7%), as the demand for exports rises against the backdrop of gradually increasing investments. Spain and Ireland will still be in recession in 2010. Despite the improved economic outlook, there will be continued weakness in the European construction and automotive industries. In the medium term, we expect moderate average growth for the European Union (+1.4%).

Trends in gross domestic product 2010–2012
(Average annual real change)

Trends in gross domestic product 2010-2012 (bar chart)

In the United States, the economy will begin to grow again in 2010 after the recession has ended (+2.6%). However, private domestic consumption will contribute less to this growth than before the crisis because of negative wealth effects due to the fall in real estate and share prices, and higher unemployment. The U.S. government’s massive economic stimulus plan and low interest rates will support the recovery. Future options for further expansive fiscal policy will however be limited due to the sharp increase in national debt. As a result of a recovery in consumption and investing activities, we expect solid economic growth in the medium term (+2.8%).

The economy in Asia (excluding Japan) will experience strong growth again in 2010 (+7.0%). This recovery will be driven by enormous government demand in China and private demand in India. Foreign trade should also provide positive impetus for the region. In the medium term, we expect strong annual growth in the regional gross domestic product (+7.1%). Construction activity and industrial production are growing especially fast.

In Japan, growth in 2010 will be moderate (+1.3%). Although Japanese businesses still seem reluctant to invest, domestic demand and exports will begin to grow more strongly again. In the medium term, we expect solid average growth (+1.5%).

In South America, growth in gross domestic product will be clearly positive in 2010 (+3.7%). Thanks to solid domestic demand and the global economic recovery, the region will benefit from rising raw materials prices through foreign trade. In the medium term, we expect strong annual economic growth (+3.6%).

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