Global economy 2013: Outlook still clouded for the moment

Munich Re’s outlook for the global economy presents a subdued picture. Global economic growth will be hardly any higher in 2013 than it was in 2012, and inflation will remain moderate. However, there are significant downside risks.

Munich. Munich Re's economic experts expect that global economic growth will not be noticeably higher in 2013 than in 2012, although the growth dynamics should improve in the second half of the year. The debt and confidence crisis will continue to have a dampening effect on growth in the eurozone, which will in turn burden the growth of other economies due to the weak demand for imports. Positive impulses can, however, be expected from key emerging countries such as China. The continuing weakness of the global economy coupled with only moderate increases in the price of oil should keep inflation low.

Dr. Michael Menhart, Head of Munich Re Economic Research, points out the downside risks inherent in this forecast: "The risks are significant in terms of their effects, and outweigh the existing opportunities: While over the short term, pending decisions on the fiscal consolidation in the USA (fiscal cliff, debt ceiling) are in the spotlight, the uncertainties surrounding future developments in the eurozone will remain the key risk factor for the year 2013 as a whole." The possibility of a geopolitical conflict in the Middle East or even in East Asia are further risks.

Munich Re clients can access the full Economic Outlook with all the details of the macroeconomic conditions for 2013 in our client portal connect.munichre.com.