Macroeconomic Environment

According to the initial figures published by Eurostat, the economy in the euro zone grew only slightly in 2008. In the reporting period, the price-adjusted gross domestic product (GDP) in the euro zone amounted to plus 0.7 per cent, compared to plus 2.7 per cent in the prior year. The growth dynamics slowed down sharply in the course of the year. GDP only increased over the prior quarter in the first quarter; in the subsequent quarters, it started to decline, and in the fourth quarter, the economy shrunk by 1.5 per cent. This is the greatest drop since the establishment of the currency area. Nevertheless, investments for equipment fared better over the entire year, boasting an increase of 2.2 per cent.

Economic performance fell in the course of the year

According to information provided by the Federal Statistical Office, the German economic performance, too, receded considerably. Though the GDP increased by 1.3 per cent in the reporting period, 2007 saw growth of 2.5 per cent. The quarterly performance more or less corresponded to that of the EU. The German economy only managed to grow in the first quarter of 2008. In 2008, growth stimuli were generated exclusively by domestic business. Gross investments in fixed assets accounted for the highest growth rate of 4.4 per cent. Investments in equipment increased above-average by 5.9 per cent, and were thus only slightly below the prior-year value of 6.9 per cent. In 2008, the price-adjusted government expenditure increased by 2.0 per cent, which almost corresponds to the growth rate of the prior year (2.1 per cent). Due to the poor increase in exports, the external contribution to economic growth diminished by 0.3 percentage points.