High Economic Growth in 1998, but Increasing Risks in 1999. Economic Outlook for 1998 and 1999

With a rate of 3.3 percent, economic growth in 1998 will reach the highest value since 1991. This dynamic development is mainly based on a vigorous expansion of exports and investment. The forecast of GDP growth has to be revised downwards for 1999 (+2.8 percent), in line with projections for the global economy. The crisis on the financial markets – the main risk factor of the forecast – will dampen economic growth, a revival of domestic demand notwithstanding. The plunge in world commodity prices will depress inflation to a record low of 1 percent. Unemployment is likely to decline only slightly to 4.4 percent, despite strong employment gains.