Global economy in good condition

According to studies by the International Monetary Fund (IMF) and the Organization for Cooperation and Development (OECD), the condition of the global economy in 2007 was very robust when it was hit by a financial crisis in the summer that was triggered by the problems in the U.S. housing market. The impact of the turmoil on global economic development has, however, remained limited so far. According to IMF data, real global gross domestic product (GDP) increased in 2007 by 4.9% compared with growth of 5.0% in 2006.

Economic growth slowed noticeably in the United States. GDP rose by 2.2% in 2007 as compared with 2.9% in 2006. This growth was primarily driven by private consumer spending, although activity in the new home construction sector declined. The Japanese economy lost momentum in 2007. As a result, GDP growth declined from 2.4% to 1.9%. Private consumption recovered from a period of weakness in 2006, however, its expansion was not as strong as expected. Strong economic expansion in the People’s Republic of China continued in 2007 with GDP growth of 11.4% as compared with 11.1% in 2006.

Economic development within the euro zone was very favorable in 2007 despite the turmoil. GDP rose by 2.6% in 2007 as compared with 2.8% in 2006. According to calculations by the German Federal Statistics Office, the German economy recorded a 2.5% increase in GDP in 2007 compared with 2.9% in 2006. This increase succeeded despite the dampening effects of the increase in value-added tax and the uncertainty in the capital markets. Growth was driven by an increase in investments in machinery and equipment and by higher demand from abroad, but not from private consumption, which continued to stagnate also due to fiscal policy, for example the increase in value-added tax.

Global growth of the pharmaceutical and chemical markets

According to the market researchers at IMS Health, the global pharmaceutical market grew between 6% and 7% in 2007. The world’s 13 most important pharmaceutical markets increased by 4% and achieved a volume of US$ 415 billion. Half of this amount was attributable to the United States, which registered growth of 4%. Japan remains the world’s second largest pharmaceutical market and grew by 4% to US$ 58 billion. The five most important European pharmaceutical markets, France, Germany, Italy, Spain and the United Kingdom, together achieved a market volume of US$ 107 billion, growing by 3%.

The European chemical industry association CEFIC, which represents around one-half of all global chemical companies, expects production in the European chemical industry to increase by 2.7% in 2007. According to information from the German chemical industry association (VCI), production by German chemical companies increased in 2007 by 4.5% and sales increased by 7.5%.