#Savings Banks


Markets and Trends 2019: Global economy in the gym

  • Increasing divergence between major economic areas
  • Germany and euro area to see higher growth in the course of 2019
  • First rate hike in the euro area
  • End of year forecast for DAX: 13,200 points

Helaba's economic and capital market outlook this year is based on the theme of the "gym". 2019 will be an exhausting year, so fitness will be essential. The challenges can only be met with a certain level of perfor­mance. Helaba's econo­mists are therefore sending the global economy to the gym. Because many countries will work up a sweat, some will even be able to chalk up their first successes over the course of the year.

Baseline scenario: “Global economy in the gym“ (70 percent)

At 3.4 percent, global economic growth in 2019 will be almost as strong as in the previous year. However, the most important economic areas will diverge. While the US and China are likely to lose momentum, the situation in the euro area and Germany will pick up over the course of 2019. The economic situation will stabilise in emerging markets.

The boom in the US economy was mainly the result of massive tax cuts and strong spending increases. This effect will taper off and growth will slow to 2.6 per cent in 2019 (2018: 2.9 per cent). "In the euro area, how-ever, there will be more fiscal stimulus. The moderate oil price in combination with a stronger euro will also have a supportive effect. In addition, major economic conflicts such as Brexit, the trade dispute with the United States and dis­agreements over the Italian budget, will subside," explains Dr. Gertrud R. Traud, Helaba's Chief Economist.

In Germany, con­sumption will make a signi­ficant contribution to economic growth and compen­sate for headwinds from foreign trade and the on-going reluctance to invest. Overall, economic growth will reach 1.5 per cent (2018: 1.6 per cent) and thus remain above the employment threshold. Employment growth is expected to slow somewhat, partly due to skills shortages. At around 2 per cent, the inflation rate will be slightly higher than in 2018. The study contains a total of 16 country analyses and brief summaries on the German federal states of Hesse, Thuringia, North Rhine-Westphalia and Brandenburg.

Inflation and monetary policy

In view of full employment and rising core inflation, the US Federal Reserve is likely to hike the key interest rate further to between 3 and 3.25 per cent in 2019 and then take a break. However, the ECB will be in a position to push ahead with its strategy of exiting monetary policy crisis mode by raising interest rates thanks to an accelerating euro economy and inflation close to its target. The refinancing rate is expected to rise to 0.25 per cent and the deposit rate to -0.2 per cent in the second half of 2019.

The strength of the US dollar will recede. With weaker cyclical tailwinds for the US currency, its yield ad-vantage over the euro will diminish as a result of the ECB's first rate hike. “On balance, Trump's fiscal and trade policies are proving to be a burden on the greenback. The euro-dollar exchange rate will rise to 1.25”, says Traud.

Prospects for investors

A higher repo rate in the euro area, higher US yields and mounting inflation expectations should then propel 10-year Bund yields to around 1 percent. The yield on US Treasuries of the same maturity will also pick up, but will remain well below the 4 per cent mark. The spread between US and German government bond yields will narrow, having diverged sharply in 2018.

Following the end of quantitative easing by the major central banks, competition will intensify both between and within asset classes. In the case of equities, US stocks are not well placed to add to their relatively high valuation. Euro equities, in contrast, are only moderately valued. In the course of 2019, they are once again likely to benefit from an economic tailwind. This will result in a fundamentally derived range of 11,000 to 14,000 points for the DAX. Towards the end of the year, it should reach 13,500 points.

On many real estate markets, low interest rates, solid economic growth and moderate constru­ction activity will ensure a sustained upward trend in rents and purchase prices. However, the existing overvaluation on certain submarkets will continue to increase.

Negative alternative scenario: “Emergency room” (20 per cent)

In the negative alternative scenario, countries refuse to work on their fitness. Historically high debt levels, the failure to pursue a fiscal policy that is geared towards investment and sustainable growth and a severely restricted range of monetary policy remedies lead to a collapse. Investors take flight and seek refuge in safe asset classes. In times of heightened uncertainty, gold and the US dollar live up to their reputation as crisis currencies. The euro-dollar exchange rate drops significantly to 0.95. The DAX plunges into the range around 9,000-points.

Positive alternative scenario: “Relaxing spa” (10 per cent)

In contrast, the situation in the positive alternative scenario is altogether different. Here, the economic environ­ment resembles a relaxing spa. Everything feels very laid-back and a sense of ease spreads throughout the world. Sentiment improves. The US economy booms. The German and euro area economies expand by around 3 per cent. The strong global economy fuels inflation. The Fed raises interest rates sharply and the ECB executes the first rate hike earlier than expected. The euro-dollar exchange rate rises to 1.35. The DAX surpasses the 15,000-point mark.

In addition to a hard copy, we have also made a PDF version of the annual outlook available:

Ursula-Brita Krück
Deputy Press Officer

We, the Landesbank Hessen-Thüringen Girozentrale (Helaba), use cookies that are absolutely necessary to provide you with our website. No additional cookies will be set for the duration of your visit to this website if you close the banner by clicking on "Decline". If you give your consent, we will use additional cookies to process information about your use of our website for the purposes of statistics (such as measuring reach) and marketing (such as displaying personalized content).

Your consent is voluntary and not necessary for the use of the website. By clicking on "Settings", you can individually determine in detail which cookies we may use based on your consent.

You can also consent to all additional cookies at the same time by clicking on "Accept".

You can revoke your consent at any time via the "shield icon" in the toolbar on each page or change your cookie settings there.


When you visit our website, Helaba makes use of required and optional cookies. Cookies are small text files that are stored on your computer and saved by your browser. Their purpose is to make our range of services more user-friendly, for example so that you do not have to re-confirm an automatically generated disclaimer more than once. Cookies that we use are so-called “session cookies” because they are automatically reset at the end of your visit to our website.

Further information on the use of cookies on helaba.com can be found at Data protection.

cookie [publisher]purposestorage period / Follow-up processingthird country transfer
disclaimer_disclosureRequirements [helaba]necessary: Verification when accessing certain (sub) areas of the websitesessionno
disclaimer_residenceGermany [helaba]necessary: Verification when accessing certain (sub) areas of the websitesessionno
hideCookieNotice [helaba]necessary: Saves that the cookie or data protection notice will not be requested every time you visit.30 daysno
WSESSIONID [helaba]necessary: Standard cookie to use with PHP session data.sessionno

The sole purpose of using analytical services on our website is to optimise the online information we provide. Data collected in this way, such as IP address, date or time of the request, contents of the page accessed or the browser used do not enable any users to be directly identified. Analysis by Helaba of a user’s data is not intended to identify any individuals or conduct any profiling, in order to, for instance, send online advertising to visitors of our website.

You  find more information on statistics cookies here: Data protection

cookie [publisher]purposestorage period / Follow-up processingthird country transfer
_et_coid [etracker]statistic: cookie detection2 years / Evaluation to improve the user experience of our websiteno
allowLoadExternRessources [helaba]statistic: Saves the user decision that external components may be loaded automatically.30 days / Evaluation to improve the user experience of our websiteno
allowTracking [helaba]statistic: Saves the user decision that visitor behavior may be tracked.30 days / Evaluation to improve the user experience of our websiteno
BT_ctst [etracker]statistic: Is used to detect whether cookies are activated in the visitor's browser or not.session / Evaluation to improve the user experience of our websiteno
BT_pdc [etracker]statistic: Contains Base64-coded visitor history data (is customer, newsletter recipient, visitor ID, displayed smart messages) for personalization.2 years / Evaluation to improve the user experience of our websiteno
BT_sdc [etracker]statistic: Contains Base64-encoded data of the current visitor session (referrer, number of pages, number of seconds since the beginning of the session), which is used for personalization purposes.session / Evaluation to improve the user experience of our websiteno
isSdEnabled [etracker]statistic: Detection of whether the visitor's scroll depth is measured.1 hour / Evaluation to improve the user experience of our websiteno

On our website, we use a so-called re-targeting technology provided by The UK Trade Desk Ltd., 10th Floor, 1 Bartholomew Close, London EC1A 7BL, United Kingdom. With this technology, cookies (so-called third-party cookies) are stored on your hard drive when you visit our website. These cookies are either permanent or temporary cookies that are automatically deleted after a certain period of time has elapsed.

You find more information on marketing cookies here: Data protection

cookie [publisher]purposestorage period / Follow-up processingthird country transfer
EDAAT [.adsrvr.org]Marketing: Stores a temporary security token for EDAA sign-out pages such as http://www. youronlinechoices. com/1 hour / evaluation for the playout of banners for marketing purposesyes / United Kingdom
TDCPM [.adsrvr.org]Marketing: Matching IDs to avoid redundant calls.365 days / evaluation for the playout of banners for marketing purposesyes/ United Kingdom
TDID [.adsrvr.org]Marketing: recognition of web profiles over time on different websites.365 days / evaluation for the playout of banners for marketing purposesyes / United Kingdom
TTDOptOut [.adsrvr.org]Marketing: Stores the decision to opt out of re-targeting.5 years / evaluation for the playout of banners for marketing purposesyes / United Kingdom
TTDOptOutOfDataSale [.adsrvr.org]Marketing: Stores the decision against selling data to third parties.5 years / evaluation for the playout of banners for marketing purposesyes / United Kingdom
No choice made so far
Partial selection made
Agreed to all cookies