Chapter 1: Macroeconomic Conditions and Outlook

Political events such as Brexit and the ongoing trade disputes have weighed on the global economy in the last year. Weak developments in industrial production and international trade led to two consecutive years of overall stagnation. Falling demand for motor vehicles weakened industrial production, which was further exacerbated by structural changes. Trade conflicts, especially between the United States and China, severely disrupted the international exchange of goods and in some cases postponed investment activities. Ongoing political discussions, e.g. on Brexit, strikes in France, unrest in Hong Kong, and tensions in the Middle East have increased uncertainty about the political environment and existing international value chains. As a result, companies have become more reluctant to invest, which has a negative impact on economic growth. While the economic stimulus is gradually fading in the United States, fiscal policy in other countries is expansionary. In the European Union, the positive momentum is likely to be balanced across the member states.