According to the World Economic Outlook Update of the International Monetary Fund (IMF) of January 2024, global economic growth of 3.1% was achieved in 2023. The historical average of 3.8% for the years 2000 - 2019 was thus not achieved. Nevertheless, growth was slightly higher than expected towards the beginning of 2023. The development during the year was primarily influenced by the faster than expected decline in inflation, subdued demand due to high interest rates and fiscal policy support, which varied greatly between countries.

The factors that were already influencing the development of the global economy in 2022 are also having an impact at the start of 2023. Many countries had little room for manoeuvre to implement fiscal policy measures due to increased national debt. Prices, which rose in 2022 as a result of the Russian war against Ukraine, fell. The ongoing war and further geopolitical tensions nevertheless dampened economic growth. In addition, the rise in interest rates as part of the fight against inflation revealed weaknesses in the banking sector. As a result of these factors, the IMF lowered its forecast for global economic growth to 2.8% in April 2023. In the second quarter, the estimate was raised again to 3.0%. This was largely due to the reduction in impending risks from the banking sectors in the USA and Switzerland, which was achieved through the actions of the relevant authorities. The forecast for the second quarter was confirmed in the third quarter. Economic growth in the USA and some other major developing and emerging countries was stronger than expected in the second half of the year due to stable government and private consumption. In contrast, weak consumer sentiment was observed in the eurozone, which, in combination with persistently high energy prices and interest rate-sensitive commercial investments, dampened growth.

As Europe is a relevant market for Uzin Utz, the development of the European economy is important. Towards the end of 2022, there were already signs of an abrupt end to the economic expansion in Europe, which continued throughout 2023. As a result, growth of just 0.5% was achieved in Europe.

In contrast to the European economy, no growth was achieved in Germany, one of our core markets, in 2023. While gross domestic product (GDP) increased by 0.1% in the first quarter and stagnated in the second and third quarters, economic output shrank by 0.3% in the fourth quarter. Overall, economic output also fell by 0.3%. This was mainly due to the low growth of the global economy, consumer consumption reluctance due to high inflation and the poor performance of industry, which makes a major contribution to economic output. The economy in the Netherlands performed significantly worse than expected at the beginning of the year. While the EU Commission's spring forecast for real GDP growth was still at 1.8%, actual economic output was significantly lower with an increase of 0.2% according to the IMF. During the year, GDP fell in two consecutive quarters, leading to a technical recession, which was overcome by growth in the fourth quarter. The economic slowdown was primarily triggered by weak consumption, which was a reaction by households to the rising price level. The export business also developed negatively due to the sluggish economic development of the most important trading partners. In Switzerland, economic growth of 1.3% was expected for 2023 according to the estimate published by the State Secretariat for Economic Affairs in mid-December. After a good start to the year, the economic upturn slowed from the second quarter onwards as foreign demand and household consumption declined. In contrast to the Dutch economy, private consumption nevertheless had a positive impact on GDP. The inflation rate was 2.1% and the unemployment rate was roughly the same at 2.0%. Unemployment reached its lowest level in 20 years in 2023 and was reduced across all regions, age groups and genders, while the proportion of long-term unemployed also fell sharply.

In the UK, defined as a growth market, the economy stagnated in 2023 with growth of 0.1%. As economic output was still expected to fall by 1.0% at the beginning of the year, the trend was nevertheless significantly more positive than forecast. Unemployment remained at a low level despite the stagnation and real wages rose over a longer period of time. Nevertheless, this could not prevent a technical recession from occurring at the end of the year. Of all our growth markets, the USA recorded the strongest economic growth at 2.8%. This was mainly due to household consumption and government spending. As a result of the fiscal policy measures, the government deficit increased significantly and totalled USD 1.84 trillion at the end of 2023. The upturn was also reflected in employment figures, with the unemployment rate remaining at a historically low level. Inflation was also reduced, with declines in food, energy and goods prices being the main contributors. While the economy in the growth market of France recorded growth in the first half of the year, which was particularly strong in the second quarter, it stagnated in the second half of the year. Due to the stable first half of the year, GDP rose by 0.9% overall. This was primarily due to stronger domestic demand and foreign trade as a result of government support. In France, too, the economic upturn was slowed by high inflation and more difficult financing conditions. Inflation peaked at 7.0% in the first quarter of 2023 and fell to 4.2% by the fourth quarter, mainly due to falling energy and commodity prices.