The staff of Deutsche Hypo ... ... the basis of our success

··· 12 ···
REPORT OF THE BOARD
OF MANAGING DIRECTORS
·· THE GENERAL ECONOMIC
ENVIRONMENT
·· GLOBAL ECONOMIC SITUATION
The world economy was able to grow strongly again
in 2005 despite some considerable negative factors.
However the rate of growth was not as dynamic as
in the previous year. The US economy continued full
steam ahead in its capacity as an engine of growth.
Whilst total economic production in the USA would
have been significantly higher were it not for the na-
tural disasters that occurred in September and Octo-
ber, the world’s leading economy proved itself to be
robust enough to remain one of the most important
sources of momentum for the global economy. Along-
side the USA, China once again made a key contri-
bution to the global economic upturn, recording
economic growth of well over 9% and forcing its
way ever deeper into the circle of major economic
regions and industrial nations. This up-and-coming
economy is consequently well on the way to esta-
blishing itself as the world’s fourth-strongest econo-
mic power behind the USA, Japan and Germany.
On the old continent, meanwhile, the figures were
modest by comparison. With a growth rate of
around 1.4%, the Europeans continue to lag well
behind the global average of over 4% and are a
long way off their target, set in Lisbon six years
ago, of becoming the world's most dynamic eco-
nomic region by the year 2010.
Nevertheless, the mood within the eurozone
brightened considerably during the second half of
the year, with a tangible increase in economic
growth that was primarily attributable to stronger
increases in industrial output, which further incre-
ased confidence in manufacturing.
·· ECONOMIC ENVIRONMENT
IN OUR TARGET PROPERTY
MARKETS
·· GERMANY
It is a long time since the Germans have ended a
year on such a confident note, looking to the futu-
re with a great deal more optimism than in pre-
vious years. The reasons are relatively obvious. As
far as the German export sector was concerned,
2005 was another record year with an expected
foreign trade surplus of in excess of € 160 billion,
a result that could not fail to have an impact on
companies' willingness to invest. The retail indu-
stry was satisfied with trading over the Christmas
period and is confident that the period of consu-
mer reticence has been overcome.
German companies, which must hold their own in
the face of global competition, have grown mar-
kedly more competitive. This has not yet had any
fundamental effect on employment. Yet, for the
first time in fifteen years, the Federal Employment