Report on Expected Developments

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1. Future Macro-Economic Development

The report on expected developments considers the relevant facts and events known as at the date the report was prepared, which could influence future business development. The forecasts are based primarily on the analyses of the International Monetary Fund (IMF) and the joint forecast.

Forecast economic data for REWE Group countries
in %1GDPInflationUnemployment
2017p2018p2017p2018p2017p2018p
Germany2.52.31.61.63.63.3
Austria2.31.92.01.85.45.1
Czech Republic3.52.62.42.13.02.7
Italy1.61.41.41.211.210.9
Hungary3.23.42.52.84.24.0
Russia1.81.74.23.95.55.5
Romania5.54.41.02.55.25.1
Slovakia3.33.71.31.77.87.0
Bulgaria3.63.21.21.66.15.5
Switzerland1.01.30.50.63.03.0
United Kingdom1.71.52.62.54.44.6
Sweden3.12.42.01.86.86.5
Norway1.41.62.12.04.03.8
Denmark1.91.81.11.65.85.6
Ukraine2.03.212.810.09.59.3
Croatia2.92.71.31.610.89.9
  • Sources: International Monetary Fund, World Economic Outlook Database October 2017, Update January 2018; Joint forecast (Autumn 2017)
  • p=projected; 1 year-on-year GDP change in per cent

Germany will report strong growth again in 2018. With inflation expected to be in the same range as in the previous year and purchasing power expected to remain stable, private consumption and the construction industry are likely to remain the driving forces behind the economy, alongside the expected positive global economic trend. However, the stable labour market trend and continued decline in the unemployment rate are not expected to provide any significant additional economic momentum. It remains unclear to what extent the future economic policies of the United States will impact global economic development.

For Austria, we expect weaker growth than in Germany. As in Germany, the Austrian economy will mainly be driven by domestic demand and the sound international economy. Private consumption bolsters the economy, although stable real incomes mean that this will not offer any significant momentum. The unemployment rate will improve to 5.1 per cent. In 2018, consumer prices will be slightly lower than in 2017 since neither commodities prices nor unit labour costs provide any particular price pressure.

Economic development in Italy for 2018 shows a slight downward trend, at 1.4 per cent and is expected to remain below the European trend. An increase in domestic demand and the good international economic development will however create the right conditions for a more positive trend in the future. The high level of government debt remains a material risk to further growth.

The Eastern European economies in which the REWE Group is represented will continue to develop at a high level in the future. The positive trend will be bolstered by domestic demand. Rising capital expenditure and a sometimes strong upturn in the construction sector will support this trend. Labour market figures continue to improve and employment rates are rising. Due to the positive development in employment figures, there will be an increasing shortage of skilled workers in some countries.

Economic growth in Switzerland in 2018 will improve slightly compared to 2017 but will continue to trail Germany at 1.3 per cent. Growth will be positively impacted by consumer and government demand. Greater gains in purchasing power as a result of declining price trends will also contribute to economic growth.

Economic development in the United Kingdom is characterised first and foremost by the uncertainties surrounding the upcoming Brexit. Generally, growth rates are expected to decline in 2018 as against 2017. As previously, there is great uncertainty as to the future development of the country, particularly with respect to the outcome of the negotiations with the European Union.

We generally continue to anticipate stable growth rates in Scandinavia for 2018. For Norway, we expect slightly better development than in 2017. Growth in Sweden and Denmark will decrease as compared with the previous year to 2.4 per cent and 1.8 per cent, respectively. The optimistic outlook on the part of consumers and industries remains the driving force behind economic growth.