Mercedes 2013 Annual Report Download - page 138

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The statements made in the Outlook chapter are generally
based on the operational planning of Daimler AG as approved
by the Board of Management and the Supervisory Board in
December 2013. This planning is based on the premises we set
regarding the economic situation and on the development
of the automotive markets. It involves assessments made by
Daimler, which are based on relevant analyses by various
renowned economic research institutes, international organiza-
tions and industry associations, as well as on the internal
market analyses of our sales companies. The prospects for our
future business development as presented here reflect the
targets of our divisions as well as the opportunities and risks
presented by the anticipated market conditions and the com-
petitive situation. We are constantly adjusting our expectations,
taking into account the latest forecasts on the development
of the world economy and of automotive markets, as well as our
recent business development. The statements made below
are based on the knowledge available to us in February 2014.
Our assessments for the year 2014 are based on the assumption
of stable political and economic conditions, and the expec-
tation that the upward trend of worldwide demand for motor
vehicles will continue. The development we have outlined is
subject to various opportunities and risks, which are explained
in detail in the Risk and Opportunity Report. E see pages 129 ff
The world economy
At the beginning of 2014, most leading indicators – above all
the index of global business confidence – suggest that growth
of the world economy will accelerate moderately this year.
After two years with significantly below-average rates of growth
of global GDP, there are now good chances of a perceptible
improvement. In particular, growth should gain momentum in the
advanced economies, while the prospects for some emerging
economies remain rather moderate.
The economic development of the United States is expected
to be rather dynamic compared with 2013. A steadily improving
labor market, the positive wealth effects of higher equity
and real-estate prices, low inflation and an upturn in investment
should allow significant acceleration of economic growth
to a rate of between 2.5 and 3%. However, this is based on the
assumption that there are no major restrictions from the side
of fiscal policy. Despite the incipient economic improvement,
the US Federal Reserve is not expected to increase interest
rates in 2014. But the expansive monetary policy in the form
of monthly bond buybacks is likely to be gradually phased
out. Furthermore, there are indications that economic dynamism
in Japan will subside as the year progresses, primarily due
to the country’s fiscal policy and the planned tax increases.
Although the European sovereign debt crisis is far from being
finally resolved, the associated burdens have decreased
to such an extent that the economy of the European Monetary
Union should move out of recession in 2014. But ongoing
high levels of unemployment and the disappointingly low level
of lending are likely to prevent any significant acceleration
of growth. Overall, fiscal policy will remain restrictive, although
much less so than last year. Total GDP growth will therefore
probably remain moderate at approximately 1%. Growth of the
German economy should once again be above average.
The economic outlook for the United Kingdom is even more
favorable, with GDP growth of probably more than 2%.
The economic revival in the United States and Europe will have
a positive impact on the emerging economies through a signi-
ficant increase in world trade. But structural problems are hin-
dering a more sustained economic upturn in some countries
such as India, Brazil and Russia. Another factor is that monetary
policy is likely to be restrictive in some countries in order
to limit inflationary pressure and to avoid capital outflows.
The emerging economies are therefore expected to post similar
growth to the previous year at approximately 4.5%. The main
assumption in this respect is that the reform measures taken
in China are effective and the Chinese economy moves onto
a stable growth path of at least 7 to 7.5%.
In total, therefore, global economic output could expand
by rather more than 3% in 2014.
Outlook.