For Wincor Nixdorf, fiscal 2008/2009 began only a few weeks after the bankruptcy of the U.S. investment bank Lehman Brothers. At first, the scale of the impact this event was to have on the global financial sector was not foreseeable; by the middle of our fiscal year, however, the dramatic consequences were becoming increasingly evident and finally led to the most severe global economic crisis since 1929.
Economic research institutes and other market experts are forecasting a downturn in overall economic output in 2009, although there is no consensus as to the actual severity of the downturn and the speed and durability of any recovery in the global economy. While the International Monetary Fund (IMF) expects global GDP to contract by 1.1% in 2009, a number of leading German economic research institutes (the “Joint Diagnosis Project Group”) have published a more pessimistic forecast in their “Fall 2009 Joint Diagnosis,” in which they predict a decline of 2.5% in world production. According to this report, economic output in the industrialized countries is set to contract by around 3.5%, and this in turn will hold back any recovery in the developing countries. In the view of the Project Group, it is this group of countries that is likely to provide the initial impetus to the global economy.
For Germany, the IMF anticipates an even sharper downturn of 5.3%. According to the Project Group, Germany is experiencing its worst recession since the creation of the Federal Republic. It expects the German economy to contract by 5.0% in 2009, with falling global demand for investment goods having a severe impact on the export industry. The crisis has spread to the entire German economy over the year, although there are now signs that it may be leveling out. Based on data released by the Project Group, the German economy recorded a slightly stronger increase in production in the third quarter of 2009 compared with the second quarter of 2009.
According to the IMF, the eurozone economy will contract by 4.2% in 2009. The Project Group predicts a fall of 3.9%. However, there are many indicators that suggest the region emerged from the lowest point of the downturn in the summer.
The IMF takes a more optimistic view for 2009 in Asia, where it expects economic growth of 6.2%, with China and India likely to record increases of 8.5% and 5.4%, respectively. In the assessment of the Project Group, Asian GDP has been experiencing a strong recovery since the spring of 2009. The research institutes therefore anticipate that China will more or less reach its government target of 8% growth and that India will see an increase in production of 6%.
Looking at the United States, the IMF sees a decline of 2.7% for 2009, while the Project Group forecasts a decline in GDP of 2.6%, albeit with signs of an end to the recession. During the reporting year, the U.S. Treasury implemented a historic cut in interest rates. The prime rate was lowered from the previous level of 1.0% to fluctuate between 0 and 0.25%.
Currency Instability.
Fiscal 2008/2009 was again marked by severe exchange rate fluctuations. The euro started as it had ended the last fiscal year at the high level of USD 1.41. After falling to USD 1.24 in November 2008, it climbed back to over USD 1.40 at the end of 2008, only to drop back to below USD 1.30 by the beginning of March 2009. In September 2009 it reached a new high for the year of over USD 1.46. At the end of fiscal 2008/2009, the euro stood at USD 1.46.
