ÖBB Annual Report 2023

51 Group Management Report Österreichische Bundesbahnen-Holding Aktiengesellschaft Consolidated Financial Statements | Group Management Report 6 European economic development The European economy proved to be surprisingly resilient in 2023, much like the global economy. Domestic demand was rather weak due to high inflation, particularly in private consumption. However, positive impetus came from the exceptionally strong labour market and falling energy prices. As a result of the tightening of monetary policy, lending and therefore investment also declined. Overall, figures currently put economic growth in the EU at 0.6% in 2023. Growth of just over 1.0% is expected for 2024. There are signs of a reversal of the pre-COVID-19 trend. The expected growth rates in southern European countries such as Spain and Greece are higher than in Germany and Austria, for example. Economic development in core RCG markets from 2022 to 2024 (changes compared to the previous year in % real) Gross domestic product Industrial production 2022 2023 2024 2022 2023 2024 Austria 4.8 -0.5 0.3 6.8 -0.6 -0.3 Hungary 4.6 -1.0 2.4 6.0 -5.1 3.4 Germany 1.9 -0.2 0.1 -0.4 -0.8 0.1 Italy 3.9 0.7 0.6 0.4 -2.3 1.2 Romania 4.2 2.3 3.2 -2.0 -4.4 2.7 Czech Republic 2.4 -0.5 0.8 2.7 -0.8 0.8 Slovenia 5.7 1.7 2.0 1.2 0.0 3.4 Bulgaria 3.8 1.7 1.6 12.8 -8.6 3.2 Croatia 6.3 2.8 1.2 1.6 0.4 1.7 Slovakia 1.7 0.5 1.1 -3.8 -0.9 0.9 Poland 5.6 0.3 2.6 10.9 -2.0 0.9 Greece 5.9 2.1 1.1 2.3 1.3 1.2 Serbia 2.3 2.0 3.0 -0.8 0.3 4.5 Source: Statistik Austria, Oxford Economics, WIFO, Weltbank. The European economy continued to face high inflation rates in 2023. The restrictive monetary policy pursued by the ECB and the other central banks in the EU is, however, bearing fruit. In the eurozone, the inflation rate (according to the HICP) fell significantly from 8.4% to 5.6%. Inflation was even higher in some European countries outside the eurozone. For example, average inflation in Hungary and Poland was still 17.2% and 11.1% respectively. Originally, high energy prices were largely responsible for inflation; however, inflation is now being driven by a broader range of goods in the basket. Core inflation (excluding energy, food, alcohol and tobacco) amounted to 5.1% in the eurozone in calendar year 2023. The ECB key interest rate was gradually increased from 2.5% at the beginning of the year to 4.5% from September 2023 in response to high inflation. The market expectation however is that the current interest rate of 4.5% is unlikely to be exceeded. As inflation cools however, lower interest rates may already be possible from mid-2024. 8 The horror scenario of a gas shortage in winter 2022 / 23 as a result of the war in Ukraine did not materialise. A mild winter and energy-saving measures in Europe reduced gas consumption by 19% between August 2022 and January 2023 compared to the same period in the previous year. In addition, imports from other countries (such as the USA and Qatar) by sea have increased. Russia, however, remain an important source of gas in Europe in the medium term. As a result of the merit order system, the high global gas prices were reflected in electricity prices in large parts of Europe. The German electricity price for non-households in the first half of 2023 was 138.0% higher than in the first half of 2021. Although the electricity price in the second half of 2023 was significantly below the crisis level in the winter of 2022 / 23, the markets expect electricity and gas prices in Europe to remain higher in the medium term. 9 The high energy prices and increased financing costs were also reflected in the industrial economy. Industrial production in the eurozone fell by 1.0% in 2023. Energy-intensive industries such as wood, paper and chemicals were hit particularly hard, with value added falling by 7.0% to 10.0% in real terms. The outlier among the industrial sectors is the automotive industry. It achieved 11.0% higher value added in 2023 compared to the previous year, but was still below the pre-crisis level of 2019. The industry is stumbling, particularly in Germany and Italy, Austria’s two largest trading partners. German industry has performed significantly worse than the eurozone average since 2019 and was also unable to match its real pre-crisis output in 2023. In Italy, industrial output fell by 2.3% in 2023. 10 8 European Commission, ECB. 9 Tagesschau, destatis, Oxford Economics. 10 Oxford Economics, European Commission. MR6 |