The global economy recovered somewhat over the course of the reporting year. This positive trend is attributable to stable production in most industrialized nations and, in particular, to an economic improvement in the emerging economies. In its January 2017 forecast, the International Monetary Fund (IMF) estimates that in 2016 gross domestic product (GDP) increased by 4.1 percent in the emerging and developing countries and by 1.6 percent in the industrialized countries.
In our core markets, economic growth rates largely recorded positive trends in 2016. GDP in Germany increased by 1.8 percent year-on-year, again driven largely by private consumption. Unemployment was low in December 2016 at 6.1 percent. The U. S. economy grew by 1.6 percent in the 2016 reporting year. At the end of 2016, the unemployment rate stood at 4.9 percent; its lowest level for nine years. GDP growth rates continued to develop positively in 2016 in virtually all countries in our Europe operating segment. The economies continued to profit from rising domestic consumption and stable demand, primarily from the eurozone. Greece is still in a period of transition and could only participate to a limited extent in the growth across Europe as a whole in 2016; however, the economy there is showing signs of stabilization, reflected in slight growth in the second half of the year.
The situation in the national labor markets in our Europe operating segment continued to improve in most countries thanks to positive economic growth. However, some countries, such as Greece and Croatia, continue to report high structural unemployment. The recession of recent years, along with economic uncertainties, have weakened the labor market situation in Greece. The labor markets in Poland and Slovakia recovered in 2016, although levels of unemployment at the older end of the working-age population and in rural areas remain high.
High structural unemployment rates lead to reduced purchasing power among those affected and impact on their willingness to spend. Some customers have adapted their demand behavior. In addition to long-term unemployment, austerity measures in the public sector and the low willingness to invest also had a detrimental effect on demand for telecommunications and ICT services. In some countries, the intense pressure to shore up state finances led to special taxes being maintained or introduced for telecommunications companies.
The following table shows the GDP growth rate trends and the unemployment rates in our most important markets.
|Development of GDP and the unemployment rate in our core markets from 2014 to 2016|
|GDP for 2014 compared
|GDP for 2015 compared
|GDP estimate for 2016 compared
|Estimated unemployment rate
|Sources: Bloomberg Consensus, Consensus Economics, Oxford Economics; January 2017.|