BDI Economic Report

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The upturn in the world economy has continued during the spring of 2010. Both the OECD and the IMF predict a dynamic upward trend.

The South-East Asian countries are showing the strongest growth. Though initially prompted by national economic stimulus programmes, the upturn here is increasingly self-sustaining with higher consumption and investments, developments which are serving to fuel global growth.

The US remains the unchallenged global engine of economic growth. Key indicators here also point to an upturn, buoyed by monetary and fiscal initiatives. Though unemployment at 9.7 % is still high, it is on the decrease. Private consumption, the main pillar of the US economy, is rising and consumer confidence showed an unexpected surge in March 2010. In view of the large production gap, inflation risks and US interest rates look set to stay on a low level for the time being. Japan is also sending out positive signals. Stimulus packages have fuelled private consumption and net exports are rising. For the first time in almost two years, private investments also increased. GDP grew 1.1 % in the fourth quarter. Japan’s close links to the economies of China and South-East Asia make a sustainable recovery increasingly likely.

The Eurozone is also feeling the upwind, though at a below-average rate. In Q4 2009, GDP was up 0.1 % (Q3 2009: 0.4 %). But the risks are still there. While the upturn is stabilising in Germany, France and Italy, Ireland and Spain are still suffering from the direct consequences of the financial crisis. At 19 %, Spain has the highest rate of unemployment in the entire Eurozone. On top of that, with macroeconomic problems intensifying in Greece, Spain and Ireland, these countries are again heading for negative growth in GDP this year.