GB Zahlenteil Neu 7 Englisch:Layout 1 16.10.2008 8:58 Uhr Seite 126 126 Increasing commodity prices Different regional economic development ECONOMIC CLIMATE The global economy continued its upturn in 2007, expanding at a rate of about 4.9 %, with growth particularly strong in Asia and Eastern Europe. The decline of the US dollar, the real estate crisis in the US and rising oil and commodity prices were the three stories that dominated the news in the period under review. The euro to dollar exchange rate began the year at 1.33 US dollars to 1 euro but fell steadily over the year to end the calendar year at 1.46. The value of the US dollar continued its downward march in the first quarter of 2008 and closed at 1.58 on the reporting date of 31 March. This relentless decline is attributable mainly to the huge US trade deficit and the much stronger growth in the euro area. The oil price also skyrocketed in the period under review. It rose from USD 62.00 per barrel (Brent) at the beginning of March 2007 to USD 101.58 at the end of March 2008, thus breaking through the critical USD 100 ceiling for the first time on 2 January 2008. The effects of these price rises are expected to reduce global economic growth to 3.7 %. As in previous years, economic trends in the major economic regions varied substantially. Asia and the Eastern Europe countries (CEE = Central Eastern Europe) posted strong growth while the United States in particular recorded a major slump in economic activities. Economic events in the United States this past year were shaped mostly by the real estate crisis. Under the pressure of mounting energy prices and more restrictive lending practices due to the sub-prime crisis, the level of economic activities plunged in the final quarter of 2007 and the first quarter of this year. Nonetheless, the final growth figure in the US for 2007 as a whole was a surprisingly robust 2.2 % (versus 3.3 % the previous year). The impact of the financial crisis spilled over beyond real estate and finance to hit parts of the “real economy”, particularly construction and transportation. The Fed responded to this crisis by lowering key interest rate several times to shore up the economy. Economic expansion in the US in recent months has relied more on exports and less on domestic consumption, a fact clearly reflected in the much lower growth forecast of 1.0 % for 2008. The International Monetary Fund is even less optimistic, predicting growth of only 0.5 % for 2008 as a whole. India and China continued to shape the Asian economic scene with another year of strong expansion in 2007. With its 11.4 % figure, China recorded its fifth consecutive year of double-digit economic growth. This robust increase was accompanied by an inflation rate of 4.5 %. To prevent the Chinese economy from overheating, the Chinese central bank simultaneously raised the key interest rate and the minimum reserve requirements for banks. The economy is nevertheless expected to remain just within the double-digit range in 2008, at 10.7 %.
GB Zahlenteil Neu 7 Englisch:Layout 1 16.10.2008 8:58 Uhr Seite 127 Countries in the euro area recorded a GDP increase of 2.6 % in the year under review, a figure slightly lower than in 2006 (2.8 %). With another year of strong economic growth, the Central and Eastern European countries once again outstripped Europe as a whole (CEE 2008: 5.8 %). The fast-expanding financial sector is a major force behind the growth in these countries. Analysts believe investments have already peaked in most CEE countries so a somewhat lower rate of growth is expected for 2008 (CEE 2009: 4.3 %). Austria, for its part, achieved considerable growth for the second year in a row. Following a GDP increase of 3.3 % in 2006, total economic output rose by 3.4 % in 2007. This decent showing is mainly attributable to dynamic exports and the fine performance in the telecom sector and in capital goods production. In tourism, the number of overnight stays increased by 1.7 % largely due to strong domestic demand. This industry expects the EURO 2008 to give an additional boost to growth. The lingering effects of the US real estate crisis on the productive economy are expected to curb growth in exports, industrial production and corporate investments in Austria in 2008. After a strong spurt early in the year, these declines are likely to push the growth rate down to 2.1 %. Positive domestic market 127