Economic environment

Economic slump bottomed out

The world economy continues to be dominated by the economic crisis. However, the worst appears to be over. A slight upturn set in towards the middle of the year. Based on our estimates, the OECD member states’ real economic output rose by 0.4 % from the second to the third quarter of 2009. The economic slump also bottomed out in the Eurozone. This region is expected to have grown its gross domestic product (GDP) for the third quarter by 0.3 %. Comparing GDP for the first nine months of 2009 with the corresponding prior-year figures results in a decline of 4.6 % in the Eurozone. Germany has been especially hard hit by the recession, owing to the high significance of exports and domestic investment in plant and machinery. Economic output in this country was down an estimated 6 % on the level recorded in the first nine months of 2008. However, the number of positive economic indicators increased in the third quarter. The German ifo business climate index for the processing industry has improved steadily since June, and utilisation of existing plant capacity is increasing again. In the UK, the decline in consumer spending has slowed. Industrial production displayed moderate signs of recovery in the third quarter. UK GDP in the nine-month reporting period was approximately 5 % down year on year. Our Central Eastern European markets have recently seen industrial production stabilise, with Poland posting growth. Polish economic output is likely to have been marginally higher in the period under review than in 2008, due to the country’s robust domestic economy. The Czech Republic and Hungary have a greater dependency on exports. Less stimulus was provided by domestic demand in these countries. Based on our estimates for the first nine months of 2009, Czech and Hungarian GDP were 5 % and 7 % down on last year’s corresponding level.