ECONOMIC AND SECTOR DEVELOPMENT
GLOBAL ECONOMIC EXPANSION SLOWS
The global economy
expanded by 3.6 % in 2007. This represents a modest slowdown
versus the prior year (2006: 3.8 %). Following strong increases
in the first six months of the year, turbulence on international
capital and credit markets resulting from the subprime crisis
in
the USA dampened economic expansion as the year progressed.
In Europe, full year GDP grew 2.9 % (2006: 3.1 %). Growth was primarily a result of the region’s emerging markets which, with around 6 % GDP expansion, again outperformed Western European economies. The latter mainly showed lower GDP growth compared to the prior year. Following a peak in May 2007, consumer confidence in the EU declined steadily over the remainder of the year.
In the USA, economic growth slowed to a level of 2.2 % in 2007 (2006: 2.9 %). This was largely a result of spillover effects from the subprime crisis. US consumer confidence declined consistently from mid-summer to November 2007, reaching its lowest level since late 2005. The main drivers of this decline were rising oil prices, less available credit as a result of the subprime issue, and a weak dollar.
In Asia, most of the region’s economies continued on a strong upswing. Asia’s GDP grew 8.6 % in 2007 (2006: 8.5 %). GDP growth in China was 11.5 %, while Japan’s economy expanded by only 1.9 %. The region’s other emerging markets grew at double-digit rates as a result of flourishing export activity. Consumer confidence in Asia increased, with the exception of Japan.
Latin American economies continued to be positively influenced by the global surge in commodity prices and increased export activity. As a result, GDP growth in the region was 5.0 % in 2007 (2006: 5.2 %). Consumer confidence in the region decreased slightly as a result of an increasing number of consumers struggling with high credit costs.
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REGIONAL GDP DEVELOPMENT 1) in % |
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| Source: Allianz | |
| 1) | Real, percentage change versus prior year; 2007 figures are estimated. |
