Economic parameters

World economy in deep recession

In the first quarter of 2009, reduced demand around the world and severe problems in the financing of foreign trade caused global trade to fall dramatically. Export-oriented economies suffered the most from these developments.

In the United States, companies drastically reduced capital expenditure. In addition, exports fell heavily, whilst private consumption remained stable. In light of the severity of the financial and economic crisis, the US Federal Reserve kept its key interest rate between 0% and 0.25%.

The Asian economies were also caught up in the turbulence of the global economic crisis. Japan was hit hardest, exporting in the first quarter of 2009 only about half of what it had exported during the same period last year. Chinese exports were also down, falling 19.7% below their prior-year level. Yet China remained well ahead of the international community.

In the euro zone, where GDP had already dropped considerably in the fourth quarter of 2008, the deep recession continued during the reporting period. Exports fell substantially once again, and companies made noticeably fewer investments. The European Central Bank reduced its key interest rate to a record low of 1.25% in order to support the economy.

The drop in world trade had a greater impact on Germany than on the euro zone as a whole. Foreign orders fell by more than 40%, and industrial production was cut back drastically. The weak economy was reflected in rising unemployment rates and a very low Ifo Business Climate Index.