Economic environment

Trends in the global economy in 2017

After moderate growth in the previous year, the global economy improved steadily in 2017. This trend was supported by monetary and fiscal policy framework conditions. Interest rates remained at a very low level in Europe and Japan. In the United States, the Federal Reserve’s policy rate hikes only led to a moderate increase in long-term interest rates. Global prices for industrial and energy raw materials rose moderately, which helped to stabilize the economic situation in the exporting countries. At the same time, the price level remained low enough so as not to dampen economic development in the importing countries. Consumer and investor sentiment continued to brighten against this backdrop.

Gross domestic product
(Real change compared with previous year ¹)

¹ Figures that refer to previous years may deviate from last year’s report due to statistical revisions.

Economic trends by region

• Stronger economic growth in the E.U.
• Economy firms in the United States
• Stable growth in Asia
• Slight recovery in South America

In the E.U., GDP growth rose from 1.9% in 2016 to 2.5% in 2017. The upturn extended to almost all E.U. countries and was supported by higher consumption and growing investment. Driven by the more stable global economy, export activities also provided positive momentum. Germany’s economy saw comparatively strong growth, at 2.5%. Growth rates in France (+1.9%) and Italy (+1.5%) also exceeded the previous years’ averages. The independence conflict in Catalonia has had little impact on the Spanish economy (+3.1%) so far. Growth in the United Kingdom (+1.8%) remained on a level with the previous year amid uncertainty about the further course of Brexit negotiations and rising inflation. The central and eastern E.U. countries recorded dynamic growth of 4.5% thanks to the upturn at trading partners in western Europe and the higher absorption of E.U. funds. Russia’s GDP rose by 1.7% after a slight decline in the previous year, primarily due to the recovery in the price of oil and the stabilization of the ruble.

In the United States, growth remained modest at the beginning of 2017 but stabilized over the course of the year. This was mainly attributable to strong private consumption on the back of the solid labor market situation. Higher levels of investment also contributed to the positive economic trend. The hurricanes in Texas and Florida in the fall did not dampen growth significantly. Overall, the U.S. economy expanded by 2.3% in 2017, considerably faster than in 2016 (+1.5%).

At 6.3%, growth in the emerging markets of Asia was slightly higher than in the previous year (+6.1%). In China, government investment incentives compensated for a slowdown. The Chinese economy grew by 6.9% overall, slightly faster than in 2016 (+6.7%). In 2017, this was primarily driven by the electronics industry, while the automotive industry saw much slower growth than in the previous year. The robust upward trend in the Chinese construction industry weakened only slightly. Against this background, GDP in the remaining emerging markets of Asia rose by 5.5% (2016: +5.3%).

Japan saw much stronger growth than in the previous year, at 1.6% (2016: +0.9%). The weaker yen and the recovery of the global economy stimulated demand for Japanese exports. Private consumption was buoyed by the strong labor market and a declining savings rate.

South America overcame the severe recession of the previous year, with GDP rising by 0.8% (2016: –2.9%). In Argentina, the economy picked up significantly as a result of economic reforms and grew by 2.8% (2016: –2.2%). The Brazilian economy also expanded, with growth of 1.0% (2016: –3.6%) on the back of higher agricultural exports and an increase in industrial production. With the exception of Venezuela, where the economy again contracted significantly, average growth in the other countries in the region was on a level with the previous year.