Business review
General economic environment
Driven by strong growth in Asia, particularly in China, the global economy continued in good shape in 2006, though the pace of economic development in the individual regions varied greatly. This tendency was reflected in the 11 markets served by Hypo Group Alpe Adria – while relatively varied, development was positive overall. In the eurozone, economic growth remained modest for the first six months of the year, but in the summer there were growing signs of an economic upswing driven by increased capital investment by industry and a rise in exports. Analysts expect the final figure for economic growth for the eurozone in 2006 to be about 2.1 %.
The performance of the Austrian economy was significantly better. Profiting from the general economic upturn in Europe and buoyed by increasing exports and the strong performance of the construction industry, growth advanced to 3.3 % from 2.6 % in 2005.
After several years of stagnation, the Italian economy rallied in 2006, but growth of 1.8 % still fell significantly short of the EU average. The upswing was driven by domestic demand – particularly a rise in household spending – and the property and financial services sectors. In Slovenia, the continued high levels of consumer spending, grassroots investment and infrastructure investments and exports contributed to economic growth of 5.2 % in the year under review.
In Croatia the sustained period of growth continued into 2006. Exports, tourism and construction all recorded above average growth. Booming investment, increased industrial production and a rise in household spending pushed economic growth in Croatia up to 4.9 %.
The economy of Bosnia and Herzegovina expanded significantly, a development reflected in the key financial indicators. Improved fiscal discipline and a decline in the shadow economy has breathed new life into the market, but has also led to a rise in inflation.
The Serbian economy once again posted significant gains, with growth of 6.5 %. The transport, construction and financial services sectors benefited most.
In line with the general economic recovery in Europe, Liechtenstein also recorded a slight increase in consumer spending, following a decline in economic performance at the start of the decade.
In Germany, the preliminary figures released by the Federal Statistical Office indicate real GDP growth of 2.5 % in 2006, up from just 0.9 % in 2005. Having declared independence in June 2006, Montenegro is aiming for EU membership as quickly as possible. At present the country is adhering to a course of strict political and economic reforms, and the use of the euro as national currency is contributing to economic stability.
In Bulgaria economic growth accelerated to 6.1 % in the first half of 2006, spurred on by imminent EU accession. It was chiefly attributable to a rise in industrial production, the dynamic growth of the construction industry and the service industries that play so vital a role in the national economy.
At 4.1 %, economic growth in Hungary outpaced the EU average, as a result of both the good overall economic climate and strong domestic demand.
The performance of stock exchanges around the world was generally satisfactory, and all the major stock markets returned impressive gains for the fourth year in a row, with double-digit price increases. Thanks to the strength of Austrian companies in Eastern European growth regions, the Vienna Stock Exchange was one of the top performers in the whole of Europe. The ATX closed the year approximately 15 % up on the previous year.
The performance of the Austrian economy was significantly better. Profiting from the general economic upturn in Europe and buoyed by increasing exports and the strong performance of the construction industry, growth advanced to 3.3 % from 2.6 % in 2005.
After several years of stagnation, the Italian economy rallied in 2006, but growth of 1.8 % still fell significantly short of the EU average. The upswing was driven by domestic demand – particularly a rise in household spending – and the property and financial services sectors. In Slovenia, the continued high levels of consumer spending, grassroots investment and infrastructure investments and exports contributed to economic growth of 5.2 % in the year under review.
In Croatia the sustained period of growth continued into 2006. Exports, tourism and construction all recorded above average growth. Booming investment, increased industrial production and a rise in household spending pushed economic growth in Croatia up to 4.9 %.
The economy of Bosnia and Herzegovina expanded significantly, a development reflected in the key financial indicators. Improved fiscal discipline and a decline in the shadow economy has breathed new life into the market, but has also led to a rise in inflation.
The Serbian economy once again posted significant gains, with growth of 6.5 %. The transport, construction and financial services sectors benefited most.
In line with the general economic recovery in Europe, Liechtenstein also recorded a slight increase in consumer spending, following a decline in economic performance at the start of the decade.
In Germany, the preliminary figures released by the Federal Statistical Office indicate real GDP growth of 2.5 % in 2006, up from just 0.9 % in 2005. Having declared independence in June 2006, Montenegro is aiming for EU membership as quickly as possible. At present the country is adhering to a course of strict political and economic reforms, and the use of the euro as national currency is contributing to economic stability.
In Bulgaria economic growth accelerated to 6.1 % in the first half of 2006, spurred on by imminent EU accession. It was chiefly attributable to a rise in industrial production, the dynamic growth of the construction industry and the service industries that play so vital a role in the national economy.
At 4.1 %, economic growth in Hungary outpaced the EU average, as a result of both the good overall economic climate and strong domestic demand.
The performance of stock exchanges around the world was generally satisfactory, and all the major stock markets returned impressive gains for the fourth year in a row, with double-digit price increases. Thanks to the strength of Austrian companies in Eastern European growth regions, the Vienna Stock Exchange was one of the top performers in the whole of Europe. The ATX closed the year approximately 15 % up on the previous year.
