Germany Monitor

Sub-Saharan Africa (SSA) is growing fast with annual real GDP growth of over 5% in the last decade, second only to developing Asia. Medium-term growth remains robust, on the back of a recovering global economy, still high commodity prices and investment in productive capacity. SSA is at a crossroads. It has a window of opportunity to capitalise on its youth surge and resource wealth to create employment and inclusive growth. Political change and reforms are key. It will not be easy but democratisation, urbanisation and virtual connectedness bode well. Investments in infrastructure/logistics and education, economic diversification, market reforms and improved governance are critical for long-term success. [more]

Croatia’s membership: A success for Croatia and the EU. Croatia will join the European Union on July 1, 2013 as its 28th member. It will be the second ex-Yugoslav state to become an EU member after Slovenia, which joined in 2004. Germany was the last EU country to ratify Croatia’s accession treaty in May, clearing its way into the EU. [more]

ASEAN, a bloc of 10 nations with an aggregate economic size of USD 2.3 tr, is preparing to go through profound changes. Already today, ASEAN is the 3rd pillar of growth in Asia in addition to China and India, with average GDP growth over the past 15 years at around 6% p.a. The region’s prospects will be much enhanced by an ambitious integration effort which seeks to achieve a single market and production base. The ASEAN Economic Community (AEC)'s envisaged launch at the end of 2015 will be a potential game changer for ASEAN. [more]

This study reviews how Japanese banks have responded to the adverse macroeconomic environment during the past ten to twenty years. The experience of Japanese banks provides some valuable insights into the effect of a prolonged phase of low interest rates on bank balance sheets and profitability. Banks have adapted both the cost and income drivers of their business. Profitability and efficiency gains have been limited though. While Japanese banks have reduced their bad loan problem, they have also become increasingly exposed to their home sovereign. [more]

Demographic change has come far as an issue for medium-sized businesses. When it comes to the necessary investments, for example in further training, large family businesses are more advanced than small and medium-sized enterprises. Even though there is no threat of a general deficit in candidates for succession in the foreseeable future, succession arrangements need to be prioritised in many businesses as the number of companies ready for transfer is set to rise. Regardless of whether family succession or an external solution is chosen, transfers are often associated with significant risks. The economic and financial position of the company, the market environment and financial conditions play just as much a role as the motivation, interests and values of those involved. Given the complexity of the transfer and its huge importance in the company's history, experts recommend transfer management in which all the necessary steps are planned and implemented at an early stage. [more]

With banks searching for sources of income and growth and the relationship of trust with their customers being redefined, pricing is a key issue in retail banking. Price-setting calculations for retail financial products can be quite complex and one crucial factor for success is the capacity to identify and collate all necessary information to take sound decisions on this basis. While the range of analytical options has grown considerably in recent years, the challenge banks are facing is to use them intelligently to develop client-oriented offers. To complement their pricing, banks also need convincing strategies to communicate the prices and value-propositions of their products. [more]

In this study, we analyse some of the political and economic consequences of the Arab Spring and assess opportunities and challenges for the affected countries. Political instability has taken a toll on the region’s economies. There has been a sharp slowdown in economic activity, deteriorating external and fiscal accounts and decreasing FX reserves. The long-term challenges for the region remain as pressing as ever: high unemployment (especially among the youth), inefficient subsidy regimes and low trade diversification, among others. Expectations for rapid improvement after the Arab Spring will be disappointed, but there is a chance that less oppressive governments will be more responsive to their peoples’ demands and thus at least attempt to tackle those problems. [more]

Electrical equipment in the health sector is an important factor for macroeconomic development worldwide. Modern electromedicine boosts the efficiency of healthcare processes, improves the health of the general population, reduces the time spent by patients in hospital and cuts the cost of care. High-quality products should enable the German electromedicine sector to maintain its world market-leading position – despite growing price competition. Accordingly, we expect real sales growth of 5% yoy in both 2012 and 2013. [more]

The Foreign Account Tax Compliance (FATCA) provisions of the U.S. Internal Revenue Code comprise an important broadening of the international reach of the U.S. tax system. This law is aimed at countering tax evasion by U.S. citizens and residents who receive earnings from assets held offshore. Currently a growing number of Intergovernmental Agreements between the United States and partner countries are being negotiated to overcome the conflict of laws issues raised by the application of FATCA as well as to simplify implementation and reduce compliance costs. [more]

We are going through a period of structural change – including when it comes to knowledge as a resource. The emerging knowledge economy is gaining ground around the globe. Read on to discover how much (more) knowledge is being produced, what trends are evident in relation to investment in knowledge, how money is made from knowledge, what are the products of the knowledge economy, and who are the main players in this knowledge revolution and knowledge economy. You will also find out what opportunities the emerging knowledge economy offers for companies and regions. [more]