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The Eurosystem Secures Price Stability<br />
U.S. economy<br />
remains dynamic<br />
ment, portfolio investment, financial<br />
derivatives). Both inward and outward<br />
direct investment contracted<br />
perceptibly against the 2003 values,<br />
partly on account of extraordinarily<br />
high direct investment as a result of<br />
restructuring measures.<br />
Powerful Global<br />
Economic Growth in <strong>2004</strong><br />
<strong>2004</strong> marked the highest real-term<br />
world economic growth in 20 years —<br />
more than 5.1% (IMF, April 2005).<br />
The growth powerhouses were the<br />
U.S.A., China and the East Asian<br />
emerging economies. The global recovery<br />
was to a good extent propelled<br />
by expansionary economic<br />
policy impulses, but began to lose<br />
momentum from the spring of<br />
<strong>2004</strong>. This weakening, albeit at a high<br />
level, stemmed from a more restrictive<br />
economic policy stance, above<br />
all in the U.S.A. and in China,<br />
coupled with burgeoning oil prices<br />
and the resulting decline in consumer<br />
spending as well as the boost in<br />
commodity prices in the wake of<br />
Key Figures for Selected Regions<br />
the Chinese industrial sectorÕs high<br />
demand for raw materials.<br />
Real economic growth was fastpaced<br />
in the U.S.A., coming to<br />
4.4% in <strong>2004</strong>. However, the upswing<br />
lost some momentum in the course<br />
of the year; especially export growth<br />
slipped despite the weak dollar. Conversely,<br />
import growth was far livelier,<br />
causing net exports to tone<br />
down growth and the current account<br />
deficit to augment to 5.4% of GDP.<br />
Furthermore, household consumption<br />
decelerated temporarily in the<br />
second and third quarters, remaining<br />
animated overall, however (<strong>2004</strong>:<br />
+3.8% in real terms). The dip in<br />
spending growth may be traced to<br />
the petering out of the impulse provided<br />
by expansionary fiscal policy,<br />
mounting prices and the U.S. Federal<br />
Reserve SystemÕs tightening of the<br />
monetary reins with higher interest<br />
rates from June <strong>2004</strong>. By contrast,<br />
investment growth was unabated<br />
throughout <strong>2004</strong>. Investment in<br />
equipment and software as well as expenditure<br />
on housing posted solid<br />
EU-12 EU-15 EU-25 U.K. U.S.A. Japan China<br />
<strong>Annual</strong> change in %<br />
GDP (real) 2002 0.9 1.0 1.1 1.8 1.9 0.3 8.0<br />
2003 0.5 0.8 0.9 2.2 3.0 1.4 9.3<br />
<strong>2004</strong> 2.1 2.3 2.4 3.1 4.4 2.7 9.5<br />
Inflation rate 2002 2.3 2.1 2.1 1.3 1.6 0.9 0.8<br />
2003 2.1 2.0 1.9 1.4 2.3 0.3 1.2<br />
%<br />
<strong>2004</strong> 2.1 2.0 2.1 1.3 2.7 0.0 3.9<br />
Unemployment rate 2002 8.4 7.7 8.9 5.1 5.8 5.4 x<br />
(Eurostat definition) 2003 8.9 8.1 9.1 4.9 6.0 5.3 x<br />
% of GDP<br />
<strong>2004</strong> 8.9 8.1 9.0 4.7 5.5 4.7 x<br />
Net deficit 2002 2.4 2.2 2.3 1.7 3.8 7.9 3.3<br />
2003 2.8 2.8 2.9 3.4 4.6 7.7 2.8<br />
<strong>2004</strong> 2.7 2.6 2.6 3.2 4.4 7.0 2.4<br />
Current account surplus/deficit 2002 1.0 0.7 x 1.7 4.4 2.8 2.8<br />
2003 0.5 0.3 x 1.8 4.7 3.2 3.2<br />
<strong>2004</strong> 0.6 0.4 0.2 1.9 5.4 3.7 4.2<br />
Source: Eurostat, European Commission; China: IMF.<br />
24 ×<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong>
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