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| | Interim Group Management Report5BUSINESS AND OVERALL CONDITIONSaaEconomic environment remains favorableaaa Modest development noted in rail passenger transporta Rail freight and land transport post strong growthChanges in the Management Boardand the Supervisory BoardNo changes occurred in the membership structure of either theManagement Board or the Supervisory Board during the periodunder review.Business environmentMANAGEMENT BOARD ASSESSMENTOF THE BUSINESS ENVIRONMENTThe continued recovery of the global economy during the firsthalf of 2011 drove growth in our core markets, which in turnmade a favorable impact on the development of our business.The period under review was also marked by rising pricesfor commodities, and the sovereign debt crisis, which worsenedfurther at the end of the reporting period and in July 2011.The vast majority of our activities in passenger transportis highly dependent on economic developments within our homemarket, Germany. During the first half of 2011 these results weresupported by favorable developments in the labor market andrising incomes. Within this environment our rail passengertransport business developed slightly favorably compared tothe first half of 2010.The European passenger transport market plays an in ­creasingly important role for us following our acquisition ofArriva. Demand in this market is also heavily dependent onstate-financed ordering organizations. Due to tight publicbudget situations in certain EU countries, ordering organizationsare being forced to cut costs and save, which in turn hasa dampening effect on demand.Strong economic development in all important regions,especially in Germany, led to a substantial improvement in ourrail freight transport business.​Our worldwide transport and logistics activities also benefitedfrom the continuing favorable economic conditions.OVERALL CONDITIONS CONTINUETO DEVELOP FAVORABLYThe global upswing continued during the period under review.Based on first estimates, the global economy rose by roughly3 % over the same year-ago period and thereby at a slightlyslower rate.The increase was again driven by growth in the developing andemerging markets, where the pace of total growth barely slowed.China’s economic output barely slowed despite tighter monetarypolicy, shrinking availability of credit, and higher inflation.Economic development in the rest of the Asian region remainedstrong. In contrast, the pace of economic growth in most of theindustrialized nations was less dynamic. The rate of economicgrowth in the USA weakened while expenditures for constructionwere again sluggish. Although consumer spending remainedstrong, it was burdened by rising energy prices and the unchangedhigh level of unemployment. In Japan total economic output felldue to the effects of an earthquake.The European economy’s pace of growth picked up duringthe period under review, especially in Western Europe. At thebeginning of the year economic growth within the Eurozoneexpanded at the fastest pace since the onset of the economicand financial crisis in 2008, although development noted forindividual countries was very mixed. Economic output roseparticularly sharply in Germany and also expanded strongly inFrance, among other countries. While Italy and Spain were stillable to generate weak growth, economic output declined inGreece and Portugal. Domestic demand in Eurozone countrieswith particularly high levels of sovereign indebtedness wasconsiderably dampened due to measures taken to consolidategovernment finances. Economic development in the remainingcountries within the European Union was uneven. While Swedencontinued to experience a strong economic upswing, and mostof the central and eastern European countries posted substantialgains in GDP, the economic recovery in Great Britain wassluggish as domestic demand was extremely weak due to theunchanged poor situation in the labor market, declining realhousehold income and the government’s austerity policies. GDPgrowth posted for Eastern European countries continued togrow at a faster pace than the average EU rate.A strong continuation of the economic rebound in Germanywas recorded at the beginning of the year. After adjustment forseasonal, price and calendar factors, German gross domesticproduct (GDP) rose by 1.5 % over the previous quarter, whichmeant that the pre-crisis level seen at the start of 2008 hadbeen surpassed. In a year-over-year comparison, German economicperformance rose by 5.2 % (calendar adjusted by 4.9 %),