Die Lage der Weltwirtschaft und der deutschen Wirtschaft im Frühjahr 2004

A global economic upturn is unfolding. Since mid-2003 production has been expanding rapidly in many countries and capacity utilisation has been rising. The upswing is centred in North America and in East Asia. Its robustness is evidenced by the marked increase in investment and in the fact that the optimistic mood in the stock market was not lastingly impaired either by the most recent terrorist acts or by the renewed worsening of the situation in Iraq. Investment was favourably affected by monetary policy: The U.S. Federal Reserve, the Bank of Japan and also the European Central Bank have maintained an expansionary stance for some time. Internationally the costs of external financing are low, in nominal as well as in real terms. All this has bolstered expected sales, not least in the information and communications industry. The latter was particularly hard hit in the recession in 2001 and product innovations have now given rise to higher demand. After a rapid expansion in the first half of this year the upswing in the international growth regions will become somewhat less strong.

The German economy is slowly emerging from stagnation. Since last autumn production and demand are once again increasing, albeit at a slow pace. The decline in capacity utilisation and employment continued. Despite the marked appreciation of the euro impulses for the recovery came from the vigorous economic development in the rest of the world economy. In addition, the level of uncertainty has declined, partly due to the end of the war in Iraq, so that the expansionary stance of monetary policy is increasingly having effects on the German economy as well as on the rest of the Euro Area. First signs of a recovery of domestic demand are discernible in investment in machinery and equipment. Private consumption, however, remains sluggish.
The institutes expect the German economy to further recover during the forecast period. However, the upward trend will strengthen only gradually. The negative effects of the euro appreciation are still prevalent and lessen the positive impact of the economic upswing outside the Euro Area. Given the assumption that the US-dollar will not depreciate further, this factor will lose some of its importance in the latter part of 2004. The stimulating effects on exports will gradually affect investment and the latter will increase substantially more rapidly despite the burdens imposed by fiscal policy. Monetary policy is expected to lend support by maintaining its expansionary stance.