DHL 2004 Annual Report Download - page 46

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China continued to enjoy unabated strong economic growth. At 9.5%, gross domestic
product rose even faster than in the previous year. The increases in capital spending were
so strong that the government was prompted to take measures to counter the economy
overheating. The country continued to enjoy increasing popularity among international
investors. Foreign direct investment was up again by 14% and reached US$ 60.6 billion,
a new record high. China’s increasing integration into the global economy was also
reflected in very strong increases in imports and exports, which rose 35.4% and 36.0%
respectively.
Economic developments in the euro zone also benefited from the positive global
conditions, although growth in gross domestic product was only moderate. Economic
development was also extremely heterogeneous. In some euro zone countries, such as
France and Spain, growth was driven mainly by domestic demand.
In Germany, on the other hand, the somewhat below-average growth in GDP was
mainly rooted in an improved trade surplus, whereas private consumption again declined
slightly. Consumers’ willingness to spend, which was already low, was further impacted
by the price of oil. In addition, there was substantial uncertainty due to changes in the
social system such as medical practice fees and the Hartz IV social reforms. The level of
investment, which declined for the fourth consecutive year, was also disappointing. There
were, however, tentative signs of recovery in the second half of the year.
Oil prices hit record levels
Oil prices rose unexpectedly sharply in 2004, as can be seen from the diagram below. At
the beginning of the year, almost all experts were expecting a drop in the price of Brent
crude below the US$30 per barrel mark for the remainder of the year. From mid-year on
however, the price increased massively. In July, it broke through the US$ 40 barrier, beating
the previous all-time high, and in October it even breached the US$ 50 mark. The develop-
ment essentially had two causes: on the one hand, demand for oil surged massively
because of the unexpectedly buoyant upturn in the global economy; on the other, this
demand – in particular from China and India – met with only limited production capacity.
It was only after the fears of an oil shortage had faded that oil prices again experienced a
clear downward correction.
Price of Brent crude per barrel in 2004
in US$
55
50
45
40
35
30
25
12/31/03 02/27/04 03/31/04 04/30/04 05/31/04 12/30/04 01/30/04 06/30/04 07/30/04 08/31/04 09/30/04 10/29/04 11/30/04
42