Global economic performance remained significantly below the expectations of most experts at the beginning of the year, however, during the year, some aspects of the economy stabilised. According to information from the International Monetary Fund (IMF) the level of global economic growth was almost 3.1% in October 2015, which was still 0.7 percentage points below the forecasts of October 2014. US growth was comparatively strong, at 2.6%, while the euro zone was considerably below average at 1.5%.
The largest emerging markets also developed weaker than forecasted. This is true in particular for China, Russia, South Africa and Brazil. India, on the other hand, was still able to increase its GDP in 2015 by over 7%. The past year was a difficult one for the Austrian economy, with a growth of 0.8%. The insurance industry was able to achieve an above average sector result, of 1.8%, but was not able to meet the expectations of the original forecasts as a result of the generally weak economic conditions.
Central and Eastern Europe (CEE) recorded an average growth adjusted for purchasing power of 2.9% (-0.7 percentage points in comparison with 2014). In particular, the markets of Czech Republic, Poland, Slovakia, Slovenia and Hungary were able to further secure their positions as growth markets with average GDP growth of 3.5%. In addition, the Baltic region’s economy performed better than the EU average in 2015.
In 2015, Ukraine reached the low point in its crisis, with a 9% decline. Bulgaria, on the other hand recorded stable development of 1.7%, Croatia and Serbia were able to record growth again for the first time, with 0.8% and 0.5%, respectively. In Romania, the economy grew at a rate of 3.4%, a 0.6 percentage point improvement to the previous year. In retrospect, both the crisis in Ukraine and the sanctions against Russia had a less negative effect on the other CEE countries than had been feared.
The weak global growth is connected to the policies of the central banks in the USA and the EU. While the Fed was not willing to raise interest rates as early as expected, despite good economic data, the ECB stuck to a comprehensive bond purchasing programme. In the insurance industry, the low interest rate environment represented a particular challenge for life insurance companies.
On the positive side, the low oil price provided the economy with significant support during the past year, particularly as it had the effect of a tax reduction.