entire - Deutsche Bank Annual Report 2012

Deutsche Bank 01 – Management Report 141
Financial Report 2010 Outlook
Outlook
The Global Economy
The V-shaped economic recovery in key industrialized economies, and especially emerging markets, came to
an end in autumn 2010 as the impact of special factors tapered off and growth normalized. Furthermore, several
countries, particularly those on the periphery of the eurozone, have implemented restrictive fiscal policies and
many other countries will follow suit in the course of 2011. The same can be said of monetary policy. A number
of countries have already implemented a monetary policy turnaround, such as Australia, Norway, China and
many other emerging market economies. The European Central Bank will probably start to exit its extremely
lax monetary policy around the middle of the year, and the U.S. Federal Reserve may follow towards the end of
the year. Global economic growth is therefore likely to slow to around 4.25 % in 2011. However, this would still
be distinctly above the average growth rate of the past three decades. There has been a noticeable decline in
the risks to U.S. growth recently, not least thanks to improved economic indicators. The U.S. economy could
grow by 3.75 % this year. For the Asian emerging markets, we are expecting more balanced and sustainable
growth of around 8 %, following 9.5 % in 2010.
The exceptional situation facing monetary and fiscal policymakers in the wake of the crisis may entail risks for
the global economy. While a smooth exit from the highly expansive policies would be desirable to counter the
risk of inflation, this poses a huge challenge given the major uncertainty about economic fundamentals, the
stability of individual areas of the financial system, and market reactions to specific exit measures. Sovereign
risk may remain an issue in 2011 if some countries fail to convince the financial markets that they will be able
to stabilize their fiscal position in the long term. A worsening of the debt crisis in some eurozone countries could
also lead to a destabilization of the banking systems, which would pose major difficulties for a change in monetary
policy direction. In China and other emerging market economies, there is a risk not only of price bubbles in
the real estate sector but also of a general acceleration in inflation. All of these factors may result in turmoil in
the financial markets, which would in turn dampen the pace of the global economic recovery.
Persistent underutilized production capacity in the industrialized countries should contain inflationary pressures,
which are stemming primarily from rising energy and food prices. In the U.S, we expect the inflation rate to
accelerate to a good 2 % this year. The eurozone inflation is likely to accelerate from 1.6 % to 2.25 %, also
driven by some steep tax increases in the peripheral states.
Economic growth in the eurozone is expected to slow to almost 1.5 % in 2011, with the uneven trend continuing.
The Greek and Portuguese economies are likely to contract during the course of this year in view of drastic
consolidation measures, and the Spanish and Irish economies will more or less stagnate. Among the larger
eurozone countries, Germany should again have the highest growth rate of 2.5 %, continuing to expand
beyond potential. German private consumption should expand by almost 1.5 % after almost stagnating in recent
years. Unemployment in Germany is expected to decline further. In 2011, the average number of people
unemployed could fall below the 3 million mark, with the unemployment rate close to 7 %, compared with 7.7 %
in 2010. Strong economic activity and the effects of the austerity package should ensure that the general government
deficit in Germany is brought below the 3 % Maastricht limit in 2011.