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General economic situation

Macroeconomic environment improves slightly over the course of the year

Following the generally disappointing development of the global economy in the first half of the year, the economy gained momentum slightly as the year progressed. According to the IMF, global economic growth reached 2.9% in the year as a whole. The United States in particular reported robust growth. Europe emerged from recession in the second half of the year. However, the development of the global economy was still burdened by uncertainty surrounding the debt crisis in the eurozone, the impending insolvency of the United States as well as a slowdown in the economic growth of emerging markets and the related exchange rate turbulence. As a result, the HUGO BOSS Group still faced challenging economic conditions in 2013.

Signs of stabilization of European economy

Following a negative development at the start of the year, the economy in the Eurozone stabilized as the year progressed. This was reflected in lower unemployment rates and a gradual improvement in consumer sentiment. However, severe austerity measures in many of the region's important markets, sluggish reform efforts as a consequence of the national political crises affecting some countries together with high unemployment overall put a damper on the economic recovery. This means that the development of the economy in the Eurozone over the full year was still negative, contracting by 0.4% according to the IMF. In view of lower inflation rates, the ECB continued its expansionary monetary policy and cut key interest rates to a historical low. The positive development of Germany, the region's largest economy, played a major part in stabilizing the European economy. Growth here was supported by increasing domestic demand, which was buoyed by favorable labor market and income trends. Austerity measures and the sluggish realization of economic policy reform curbed economic growth in France, which the IMF says merely reached 0.2%. In Great Britain, by contrast, the economy saw robust growth of 1.4% thanks to the monetary impetus provided by the Bank of England.

American economy continues to grow at a moderate pace

Although the U.S. economy was repeatedly affected over the course of the year by the budget dispute and the associated cut in government spending as well as higher wage and income tax, the IMF estimates that the United States returned a robust growth of 1.6% in the past year. Confirmation from the Federal Reserve that it would keep key interest rates low in the long term, declining unemployment rates and a stabilization of the real estate market had a positive impact on domestic demand and industrial activity. In addition, the weak U.S. dollar favored the export sector. In the past year, the Latin American economy was confronted with challenging foreign trade conditions, which further slowed economic growth in the region. The core markets of Brazil and Argentina were particularly hard hit.

Slower growth rates in Asia

In 2013, the Asian economy struggled with weak export demand worldwide, high private sector debt and signs of overheating in the real estate market, and disappointed with a relatively low growth rate of 6.3% according to the IMF. At 7.6%, growth in China also lagged behind the growth rates seen in the past. The Chinese government therefore implemented a comprehensive catalog of measures designed to shore up economic growth, including tax incentives and infrastructure expansion. By contrast, the Japanese economy developed robustly last year. Growth was supported by the clearly expansionary monetary policy adopted by the Japanese central bank as well as the government's economic stimulus package. The Australian economy cooled down substantially, partly due to weaker domestic and foreign demand year on year.

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