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Dr. Lorenz Weimann

Allianz SE
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Allianz Euro Monitor 2016

Mar 21, 2017 | Allianz SE

Despite the healthy economic performance in 2016, the eurozone failed to make further progress in reducing macroeconomic imbalances.

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On the reliability of population projections

Mar 17, 2017 | Allianz SE

The unexpected increase in the German population to an estimated 82.8 million as a result of the influx of refugees has sparked a debate on just how reliable population projections are.

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The economic value of security

Dec 12, 2016 | Allianz SE

Security is a fundamental human need, second in importance only to physiological needs such as the consumption of food.

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German economic forecast 2017

Nov 16, 2016 | Allianz SE

We expect the German economy to grow by 1.5% in 2017 after 1.9% in 2016. Consumption remains the driving force. We expect the global economic activity to pick up somewhat. The US economic outlook is surrounded by elevated uncertainty.

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An interest rate model for the eurozone and the US

Nov 16, 2016 |

Our extended interest rate model offers possible explanations for key interest rates, money market rates and long-term interest rates in the eurozone and the US that offer a high level of adaptability to the actual developments.

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Italy's referendum: Short-term outlook and long-term implications

Oct 27, 2016 | Allianz SE

The outcome of Italy’s constitutional referendum on December 4th will probably have limited immediate impact on either the economy or the political system.

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The yield on private financial assets - Germany in an international comparison

Sep 21, 2016 | Allianz SE

In December 2015, we analyzed asset yields of households in several eurozone countries for the years 2010 to 2014. The results were, at least for German households, sobering: Together with Austria, they showed the lowest yields, clearly below 3%.

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Commodity prices - is the bear market over?

Sep 16, 2016 | Allianz SE

In the past few months commodity prices have bounced back on a broad front having in some cases fallen sharply in recent years. This drop is to be seen as part of a classic commodity cycle that was driven primarily by the dynamic growth in the emerging markets, especially in China.

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Climate risk insurance: New approaches and schemes

Sep 15, 2016 | Allianz SE

Finding solutions for how to deal with the impacts of climate change is one of the most pressing issues of our time. It is the least and less developed countries which are the most affected by increasing frequency and severity of extreme weather events such as droughts or floods, while being the least capable of coping with them.

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Emerging markets: Sustainable turnaround in capital inflows

Sep 15, 2016 |

For several months now emerging markets have been enjoying increased popularity again among portfolio investors.

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Allianz Euro Monitor 2015

May 03, 2016 | Allianz SE

The Allianz Euro Monitor uses 20 indicators to measure macroeconomic imbalances in the eurozone. The results for 2015 show that economic stability in the currency union has increased.

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Global insurance markets - Current status and outlook up to 2026

Apr 26, 2016 | Allianz SE

3,500,000,000,000, EUR 3.5 trillion or 5.7 percent of global economic output. Preliminary estimates suggest that this is the volume of the gross written premiums generated by insurers across the globe last year

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European Capital Markets Union: Towards a more balanced financial system

Mar 16, 2016 | Allianz SE

The financial and economic crisis triggered global efforts to restore stability to financial markets, in particular the banking sector.

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Economic and financial market outlook 2016: No grounds for pessimism

Feb 23, 2016 | Allianz SE

Equity markets plummeted in the early weeks of this year. Even the risk of a global financial crisis did the rounds. This was fueled by deep concerns about the outlook for the global economy.

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Emerging markets: Asian companies expected to consolidate their debt

Feb 10, 2016 |

The rampant growth achieved by the emerging markets in the first few years following the global recession of 2009 was accompanied by a rapid increase in debt among private households and the corporate sector alike, particularly in Asia.

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Low real interest rates: Causes and outlook

Jan 21, 2016 |

Over the past few decades, inflation has been driven down both in the world's developed countries and on a global scale, so much so that fears of deflation now outweigh concerns about imminent inflation.

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Economic and financial market outlook 2016

Dec 17, 2015 | Allianz SE

Eurozone economy set to stabilize further in 2016

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The yield on private financial assets - Germany in an international comparison

Dec 01, 2015 | Allianz SE

Low interest rates have been the order of the day in Germany since 2010.

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The productivity slump in the advanced economies: Explanations and need for action

Nov 24, 2015 | Allianz SE

Almost seven years may have passed since the collapse of Lehman Brothers set the latest global economic crisis in motion – yet the lingering feeling of crisis remains.

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USA: Unemployment to drop further without accelerated wage growth?

Nov 10, 2015 | Allianz SE

The core inflation rate of the price index for personal consumption expenditures remained subdued in the third quarter of this year at 1.3%.

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Economic forecast 2016

Oct 28, 2015 | Allianz SE

Up until this fall, the economic picture in individual countries and regions has remained mixed.

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Macroprudential supervision: Hand-in-hand with long-term investors

Oct 06, 2015 | Allianz SE

The concept of macroprudential supervision and regulation has progressed in leaps and bounds in recent years: once nothing more than a piece of obscure specialist knowledge coveted by certain regulators, the idea has now become a much vaunted miracle cure that promises to ensure stability on the financial markets.

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Low interest rates, incomes and assets: The winners and the losers

Aug 04, 2015 | Allianz SE

The low interest rate policy pursued by the ECB and, in particular, the purchase of securities (QE) are having a direct and indirect impact on the incomes and assets of private households in the euro area.

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Insurance markets in Asia - quality before growth

Jul 07, 2015 |

Despite slowing economic momentum, the insurance market in Asia in the years ahead is likely to grow more strongly than in the past.

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Emerging markets - slowdown not beginning of end of catch-up process

Jul 02, 2015 |

In recent years, the forces driving global economic growth have shifted back somewhat in favor of the industrialized nations.

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Global economy: Bumpy recovery and volatile financial markets

Jun 02, 2015 | Allianz SE

At the start of the year prospects were fairly good that global economic growth in 2015 would be appreciably stronger than in 2014.

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ECB asset purchase program leaves substantial mark on yields

Jun 02, 2015 | Allianz SE

The yields on top-grade long-term government bonds have been headed south for two decades or so.

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Allianz Euro Monitor 2014

Apr 15, 2015 | Allianz SE

The Allianz Euro Monitor aims to expose existing and emerging imbalances in order to flag up the aberrations of the kind that led to the sovereign debt crisis in the euro area in a timely fashion.

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Greece, QE and the Target balances

Apr 07, 2015 | Allianz SE

The Target balances proved to be a reliable crisis barometer in the course of the euro crisis.

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Eurozone: Profits turn the corner

Mar 09, 2015 | Allianz SE

For years the economic picture in the eurozone has been characterized by weak growth, low increases in productivity and a gradual upcreep in unit wage costs.

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Oil price collapse: Economic significance and outlook

Feb 27, 2015 | Allianz SE

Oil prices are of central importance for the outlook on global economic activity and inflation. In 2015 the slide in oil prices will boost growth in many economies.

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Financial market and economic outlook 2015

Dec 22, 2014 | Allianz SE

2014 has been a remarkable year, also for us forecasters. Despite major uncertainties like the Ukraine crisis, the weakness of the Russian economy, the slowdown in Brazil, the uncertainties about the Fed’s exit from monetary accommodation and deflation fears in Europe, the world economy has not performed badly.

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The ECB inflation benchmark at times of falling commodity prices

Nov 28, 2014 | Allianz SE

The financial markets are currently reacting extremely sensitively to changes in the rate of inflation in the euro area, with the view prevailing that every further drop in inflation flags up rising deflation risks.

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The return of the long-term saver?

Nov 04, 2014 | Allianz SE

Judging by media reports, today’s low yield environment is a fatal threat to the life insurance & pension industry. With depressed yields, long-term savers are bound to become extinct, liquidity is king. Or so goes the siren song of the self-proclaimed augurs.

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Scenarios for government debt in the eurozone

Oct 22, 2014 | Allianz SE

The massive compression in yield spreads for government bonds issued by the EMU "problem countries" would appear to signal the end of the acute financial crisis.

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Economic forecast 2015

Oct 07, 2014 | Allianz SE

After a good start to the year the upswing has temporarily stalled. In the second quarter the German economy contracted slightly and business expectations have clouded over substantially compared with early in the year. A key factor behind this is the uncertain geopolitical backdrop, first and foremost the Russia/Ukraine conflict.

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The impact of the low interest rate policy on private households in the eurozone

Sep 23, 2014 | Allianz SE

Interest rates have been in decline for the last 20 years. However, most of the time, this was a response to changes in the economic environment and the downward trend was more or less justified in fundamental terms.

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German investments abroad - a bad deal?

Aug 11, 2014 | Allianz SE

In 2013 the German economy generated the world's highest current account surplus, overshooting the EUR 200bn mark with further rises likely in the future. The trend provides plenty of new ammunition to critics of Germany's current account surplus, which has been a hot topic of debate for years now.

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Global economy on growth path - but with numerous risks

Jul 24, 2014 | Allianz SE

Allianz has analyzed the medium-term economic outlook with a base scenario and three risk scenarios.

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Economic forecast 2014/2015

Apr 08, 2014 | Allianz SE

The German economy got off to a buoyant start to 2014. Industrial orders and production in January and February were well up on the corresponding level a year earlier. Retail sales in the first two months of the year were up markedly on late 2013 levels, exports and imports also rose substantially in January. The unemployment picture was also appreciably brighter than normal at the start of the year. This confirms our upbeat forecast for the German economy that we have been championing since mid-2013.

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How significant are the deflation risks in the eurozone?

Mar 04, 2014 | Allianz SE

The steep decline in eurozone inflation has prompted deflation concerns.

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Monetary policy exit scenarios in the euro area and in the US

Feb 12, 2014 |

In order to combat the financial and euro debt crisis and achieve the degree of monetary expansion that is deemed appropriate, major central banks have not only nudged their key rates down to record lows touching on zero, but have also been experimenting with a number of new instruments. 

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The risks of an appreciation of the euro

Feb 06, 2014 |

Where is the euro headed on the currency markets? Since mid-2012, our currency has gained no less than around 9% against the currencies of our 20 biggest trading partners - something that has raised a few eyebrows among forecasters given the lackluster growth in the euro zone and the ongoing debt crisis. It would appear that the market's trust in the future of the single currency has not evaporated after all. 

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Euro Monitor 2013

Dec 10, 2013 | Allianz SE

The Allianz Euro Monitor, based on 15 indicators, measures macroeconomic imbalances in the eurozone. The results for 2013 show that slow but steady progress is being made towards more balanced growth in the eurozone.

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Economic forecast 2014

Nov 07, 2013 | Allianz SE

Following a lukewarm start to 2013 the German economy has gathered steam since the spring. Second-quarter growth of 0.7 percent was buoyed by catch-up effects in the construction sector, but further production increases are on the cards in the second half of the year.

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Low productivity growth in Germany

Aug 05, 2013 | Allianz SE

Growth in an economy is determined by increases in labor productivity and labor volume.

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The end of the emerging market boom?

Aug 05, 2013 |

For many years the emerging markets were seen as the epitome of high economic growth and hence as an important driver of the world economy.  In recent months, however, there has been a flood of bad news: disappointing growth rates, mass demonstrations, political unrest and then the surge in capital outflows since late May.

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Yields in terra incognita

Jun 26, 2013 | Allianz SE

Earlier this month, US Federal Reserve Board Chairman Ben Bernanke disclosed to the financial markets that theFEDwould not be taking away the “punchbowl” any time soon, but would likely serve less punch.

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Assets in Europe - the impact of the low interest rate policy

Jun 11, 2013 | Allianz SE

The asset debate has been the subject of intense attention of late: first due to the ECB's study on private assets in Europe - which dubbed Germany the poorhouse of Europe - and second as a result of the policy adopted in response to the crisis and the resulting extremely low interest rates.

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Swiss National Bank dilemma - too much of a good thing

Jun 11, 2013 | Allianz SE

Looking across the financial market landscape, one is struck by the unusual circumstances of a central bank in a country whose currency is indeed robust and whose balance of payments is in order. Disconcertingly though, that same central bank exhibits at the very least a “non-zero” risk of incurring technical insolvency. The name of that somewhat problematic monetary institution is the Swiss National Bank (SNB).

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Economic forecast 2013/2014

Apr 09, 2013 | Allianz SE

The drop in gross domestic product by no less than 0.6 percent at the end of 2012 has impaired the economic picture at the start of 2013. In the fourth quarter of 2012 gross domestic product was 0.3 percent below the 2012 annual average. This “underhang” means that, even if the economy does pick up strongly in the course of this year, annual average growth will be only modest.

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Transatlantic Free Trade Zone: A promising, but difficult venture

Mar 15, 2013 | Allianz SE

At around 5%, global trade has been growing at an annual rate that is almost twice as fast as global economic output (+2.7% a year) over the past ten years. Exports have evidently shown much more dynamic development than domestic demand, i.e. consumption and investment. So we do not need to resort to economic theories in order to highlight the fact that the expansion in international trade has been one of the main drivers behind growing prosperity levels.

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The UK within the EU

Feb 06, 2013 | Allianz SE

A UK departure from the EU would be a lose-lose situation for all. As a global financial services provider, with a keen interest in open and fair markets, it is in the interest of Allianz that this does not happen.

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Monetary policy: Back to normal?

Jan 31, 2013 |

Only a few weeks ago the markets practically took it as read that the European Central Bank would reduce its key interest rate yet again in 2013. In the wake of ECB president Draghi's press conference at the beginning of January, however, such expectations have all but vanished.

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Demographic challenges: Immigration and integration – an EU perspective

Dec 10, 2012 | Allianz SE

Against the background of an ageing population in the European Union there are ongoing discussions about how to tackle the future challenges resulting from demographic change. On the one hand the number of silver agers is going to increase markedly in the member countries, while on the other workforce populations will not only age, but are also going to shrink or at best remain constant. In addition, there are also likely to be major social shifts as traditional family structures are going to alter, not only due to a rising number of childless persons, but also due to higher mobility and changing lifestyles leading to an increasing number of single households. 

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Euro Monitor 2012

Nov 26, 2012 | Allianz SE

The Allianz Euro Monitor, based on 14 indicators, measures macroeconomic imbalances in the eurozone. The results for 2012 show above all an encouraging picture for the peripheral countries.

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Economy and labor markets in Europe

Nov 08, 2012 | Allianz SE

Structural reforms need more time than stimulus packages or consolidation measures to unfold their full impact on the economy. Nonetheless, the time needed for structural reforms to show initial successes is tolerable. 

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Economic forecast 2013

Sep 25, 2012 | Allianz SE

Economic development in Germany is currently on particularly shaky ground. Given the good shape the German economy is in, things should continue to move upwards, but the danger that the economy will hit the skids is now considerable.

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Impact of the euro crisis on the German economy

Sep 25, 2012 | Allianz SE

Opinion is fiercely divided over what impact the European debt crisis will have on Germany.

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An explanatory and forecast model for price developments in Germany and the euro area

Jul 06, 2012 | Allianz SE

Since the global economic and financial crisis of 2008/2009, central banks in the world's major industrialized nations have been flooding their banks with virtually limitless liquidity.

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Asian growth set to be more moderate, but above all more balanced

May 29, 2012 |

The Asian emerging markets grew by 7.4% in real terms last year. In 2010, a year that was characterized by a strong global rebound from the previous severe recession, economic growth had come in at as much as 9.6%. The more subdued performance seen in 2011 is attributable to weaker global trade growth, which came in at only 5.6% compared with growth bordering on 15% in 2010. There are several reasons behind this development: first of all, the slowdown in world trade momentum has to be seen, at least in part, as a “return to normal”. Second, however, it also reflects the very subdued economic development in the industrialized countries. And last but not least, world trade took a significant knock, at least temporarily, as a result of the natural and reactor catastrophe in Japan in the spring, and the flooding disaster in Thailand in the fall of last year. In both cases, interruptions of international supply chains resulted in severe production losses.

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Eurozone: How large is the need for external adjustment?

May 10, 2012 |

In addition to the need for government consolidation, the second major challenge facing a number of EMU countries is the reduction of external deficits. Some empirical analyses have reached the conclusion that countries like Spain, Greece and Portugal would have to achieve devaluation of anywhere in the region of between 20% and over 30% to arrive at a sustainable external position.

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Scenarios for government debt in Europe

May 10, 2012 |

Almost two years since the outbreak of the government financing crisis in the euro area, the long-term debt sustainability of some member states on the area's geographical periphery remains clouded by uncertainty.

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Economic Forecast 2012/2013

Mar 29, 2012 |

The risks to the economy have risen sharply in the shadow of the sovereign debt crisis, but recent developments are not to be viewed as the start of a recession but at most a pause in growth. In fact it is more likely that the German economy will continue to see slight growth in the second half of this year. “Several ten thousand jobs are still being created month for month in the German economy. This generates income and, with underlying inflation heading down, also boosts purchasing power. A slump in consumption is therefore not very likely,” said Michael Heise, Chief Economist at Allianz.

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Scenarios on Greek government debt

Mar 23, 2012 |

Almost two years since the outbreak of the government financing crisis, Greece's long-term debt sustainability remains clouded by uncertainty.

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Economic Forecast 2012

Oct 05, 2011 |

The risks to the economy have risen sharply in the shadow of the sovereign debt crisis, but recent developments are not to be viewed as the start of a recession but at most a pause in growth. In fact it is more likely that the German economy will continue to see slight growth in the second half of this year. “Several ten thousand jobs are still being created month for month in the German economy. This generates income and, with underlying inflation heading down, also boosts purchasing power. A slump in consumption is therefore not very likely,” said Michael Heise, Chief Economist at Allianz.

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Asian economic outlook – robust, but risks still remain

Jul 25, 2011 |

The massive economic slump seen in the winter of 2008/2009 was followed by what was in part a very strong rebound in the world economy that has persisted to date. Global output rose by 4.1% last year, having tumbled 2.1% in 2009. However, the scale of the recovery varied widely among the individual countries and regions. Growth in the emerging markets was particularly dynamic, above all in Asia where industrial production is now a good 46% up on its 2007 level. For comparison: the industrial countries have still not made up the production losses caused by the crisis, with industrial output currently still almost 10% below its 2007 level.

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Economic Forecast 2011/2012

Mar 30, 2011 |

Following strong growth of 3.6 percent in 2010, Allianz is forecasting growth of 2.9 percent in 2011. “The German economy is ticking over nicely. Industrial capacity utilization is now well above its long-term average. Industry is as upbeat about the current situation as it was at the peak of the last upswing in late 2006/early 2007, the services sector even more so. Companies have been recruiting heavily; the number of people in work in the economy as a whole has risen by more than 450,000 over the past year,” said Michael Heise, chief economist at Allianz.

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Scenarios for government debt in Europe

Mar 08, 2011 |

The risk premiums that have to be paid by a number of EMU countries on the capital market remain stubbornly high. This is testimony to the market’s lack of confidence in these countries' ability to get to grips with their debt problems without the need for debt restructuring. It is not, however, just the financial markets, but also policymakers that seem increasingly convinced that Greece, at least, will have to restructure its debt.

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European economy: Outlook 2011

Dec 16, 2010 |

The euro area economy initially bounced back only hesitantly from the economic crisis 2008/2009. However, Allianz assumes that economic growth accelerated markedly in the second quarter and will reach 1.5 percent this year and 1.7 percent in 2011. “The euro area economy is strong enough to cope with a gradual exit from expansionary fiscal policy. This economic tailwind will help overcome the debt crisis,” said Michael Heise, chief economist at Allianz.

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China in 2011 - characterized by growth and change

Dec 15, 2010 |

China's share of the global economic cake is growing fast. Ten years ago, it accounted for no more than just short of 4% of global output, compared with an impressive 9.5% this year. In the past, it was the US that was looked upon as the engine behind global growth – a role that more and more voices are keen to ascribe to China. This is reason enough to look at the economic prospects in store for China next year. Two issues are likely to be the core of economic policy measures next year: the battle against overheating without compromising growth, and reform of the Chinese growth model.

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Economic Forecast 2011

Oct 05, 2010 |

Following the buoyant growth seen in 2010, Allianz expects the upswing to slow down in 2011. For 2010 Allianz is forecasting growth of 3.3 percent, for 2011 only 2.0 percent. “The German economy is currently very strong. But this cannot last forever. Austerity is the name of the game across the globe in the years ahead. That also applies to Germany with regard to public finances. An economic boom with persistently high growth is not on the cards,” said Michael Heise, chief economist at Allianz.

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Allianz Global Wealth Report 2010

Sep 14, 2010 |

The analysis of 50 countries shows that the wealth losses as a consequence of the financial crisis have not yet been overcome. Despite a marked increase to the tune of 7.5 percent, global financial assets at the end of 2009 (EUR 82.230 trillion) were still some 4 percent lower than the level of EUR 85.590 trillion reached before the crisis. “Far too little has been said so far about this blow to savers”, said Michael Heise, Chief Economist at Allianz.

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Euro area debt crisis: Impact on the economy

Jun 28, 2010 |

The euro area economy initially bounced back only hesitantly from the economic crisis 2008/2009. However, Allianz assumes that economic growth accelerated markedly in the second quarter and will reach 1.5 percent this year and 1.7 percent in 2011. “The euro area economy is strong enough to cope with a gradual exit from expansionary fiscal policy. This economic tailwind will help overcome the debt crisis,” said Michael Heise, chief economist at Allianz.

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Brazil: Stability Pays off – Strong Growth, but also Major Challenges Ahead

Jun 21, 2010 |

As recently as ten years ago, hardly anyone would have believed that overall, Brazil would emerge relatively unscathed from a crisis on the scale of the latest global economic and financial problems. In previous periods of crisis, no matter whether caused by external shock or due to home-made problems, the largest economy in Latin America has more than once been on the brink of default. The key factor in this rising ability to cope with crisis is the stability-oriented economic policy of the past decade. The foundations of this policy were laid by Fernando Henrique Cardoso, initially during his term in office as Finance Minister (1992-1994) and subsequently as President (1994-2002).

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Equity culture – a delicate fledgling

May 21, 2010 |

The allure of equities and investment funds among private investors in industrialized nations has been waning ever since the stock market crash of 2000. Whereas these forms of investment still accounted for 28.3% of the financial assets of Germany's private households in 2000, this figure had dropped to 19.7% by 2009.

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Asia – outlook after the crisis

May 10, 2010 |

Asia's emerging markets have weathered the most severe global financial and economic crisis witnessed since the Second World War far better than one would have imagined only just over a year ago. And that's not all: Asia was also the first region in the world to experience a considerable recovery in economic activity last year. So it is by no means an exaggeration to say that Asia played a key role in steering the global economy out of the toughest recession in decades. It does actually come as something of a surprise that, of all regions, Asia, – renowned as it is for its heavy reliance on exports – was the first to clamber its way out of recession, while at the same time those countries that happen to be Asia's main export markets had literally collapsed.

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Economic Forecast 2010/2011

Mar 24, 2010 |

Although the recovery appeared to be stalling at the end of 2009, the latest indicators show the economy getting off to a positive start to 2010. In its latest economic forecast for Germany, Allianz expects to see growth of 2.3 percent in 2010 and 1.8 percent in 2011. “The positive outlook for exports, the expected modest pickup in private consumption, the substantial boost from the stimulus packages and catch-up processes following the severe winter all point to buoyant growth from the second quarter of 2010,”  said Michael Heise, Chief Economist at Allianz.

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Lisbon strategy, Euro area economic outlook, and Greek debt crisis

Mar 23, 2010 |

This Working Paper takes a look back at our European Growth and Jobs Monitor and evaluates the proposals for a new reform agenda "Europe 2020". It also provides a snapshot of the economic outlook for the euro area and an assessment of the Greek debt crisis.

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Public-sector debt in Europe - Analysis and options

Mar 04, 2010 |

The difficult fiscal situation in Greece will not cause lasting damage to the European Monetary Union, according to a new report by Allianz. Greece’s alarming fiscal situation differs fundamentally from the financial problems in Portugal, Ireland, Spain and Italy. “The problems in these countries are nowhere near as dramatic as in Greece, so a comparison is not justified. There is no danger that European Monetary Union will fall apart,” said Michael Heise, Chief Economist and Head of Corporate Development at Allianz.

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US consumers: From big spender to big saver

Feb 09, 2010 |

The US savings rate could rise as high as 6% in the wake of the crisis, according to a recent study by Allianz Group Economic Research. The study examines how the recent dramatic reduction in household wealth is affecting consumption and savings behavior.

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Outlook 2010: Economic situation and capital market

Dec 14, 2009 |

Business activity in 2010 will still bear the scars of the global economic crisis, although the economic outlook for Germany has brightened considerably. Not all that long ago it was still widely held that business would not rebound before mid-2010, with a severe downturn on the labor market causing a sharp drop in consumer spending. This view was shared, among others, by the economic research institutes in their joint April 2009 opinion paper, in which they calculated that for 2010 as a whole German gross domestic product would shrink by 0.5%. Even more skeptical at that time was the forecast by the International Monetary Fund, which saw the German economy shrinking by 1% in 2010.

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Working Paper: Exit strategies

Nov 26, 2009 |

The extremely expansionary monetary and fiscal policy was essential in the wake of the severe financial market and economic crisis and its consequences are still difficult to gauge. “But it is clear that risks and costs will rise the longer the expansionary policy remains in place. It is therefore time to work out alternative exit strategies,” said Michael Heise, chief economist at Allianz. According to Allianz, an optimal exit concept should be timed correctly, avoid new financial market bubbles and be coordinated internationally.

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Economic Forecast 2010: Scope for tax reforms

Oct 06, 2009 |

Allianz expects the solid economic recovery to continue in Germany in the fourth quarter of 2009, and a promising economic start to 2010. "Compared with a year earlier, GDP in the first quarter of 2010 is likely to be around 4 percent higher than the low seen in Q1 2009. However, the overall backdrop will not allow for any fireworks in 2010," according to Michael Heise, chief economist at Allianz.

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A fundamental interest rate explanation and forecast

Jul 03, 2009 |

Notwithstanding the recent bond market recovery, the lows marked by US and European government bond yields at the end of 2008/beginning of 2009 are a thing of the past. Yields on 10yr US Treasuries are over 100 basis points, and German bunds 40 basis points higher than at the end of 2008. At first sight this does not appear to be in tune with the real economy. After all, in the first quarter of 2009 most of the major industrialized countries suffered the sharpest drop in overall output since the Second World War, and in the second quarter only some of the production losses were offset, despite growing glimmers of hope. So why this marked rise in yields? Several theories are currently being put forward.

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Asia and the global economic crisis: Challenges and opportunities

Jun 03, 2009 |

Asia was hit particularly hard by the financial and economic crisis as booming exports had been the major driver of economic growth in recent years. Between 2004 and 2008 real gross domestic product in the region rose by an average 8% a year, making Asia the most dynamic region in the world by a long way. The heavy reliance on exports resulted in an economic slump in the financial and economic crisis, on a scale last seen in the Asian crisis of 1997/1998. For 2009 we are forecasting fairly low growth of 2.7%

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Gross domestic product overstates recession

May 26, 2009 |

Germany’s real gross domestic product (GDP) has taken a tumble unprecedented in the history of the Federal Republic. However, this is not fully in line with sentiment in the German economy. How come sentiment is not as bad as the slide in GDP would suggest?

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The IMF, toxic assets and the taxpayer

May 07, 2009 |

Dreaded toxic assets: the general perception is that a lot more is still lurking out there. According to the IMF and its latest “Global Financial Stability Report”, the bill for the world’s financial sector has now swollen to the enormous figure of USD 4,100bn; banks have to shoulder some USD 2,800bn. Although financial firms around the world have already recognized more than USD 1,300bn of losses (USD 950bn by banks), the “reality-gap” has in fact risen. So, with its new estimate the IMF did nothing less than remove the light at the end of the tunnel for banks. The figures sit oddly with the recent stabilization of the financial sector. However, the markets, jaded by an overflow of bad news in the past, seemed to decide simply not to listen and continued with the rally of bank stocks.

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East Asia: A region to lead the next economic decade

Apr 27, 2009 |

The three largest economies in East Asia – China, Japan, and Korea – are much more closely integrated and are much better prepared for the coming upswing than widely perceived in Europe.

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Rebuilding stable financial markets

Apr 02, 2009 |

The financial crisis marks the beginning of a new era on financial markets. Massive change has set in. This creates the opportunity to rebuild a strong system that operates on a sufficient capital base, where the risks accumulated in financial institutions balance sheets correspond to their risk-bearing capabilities, where corporate behavior is aligned to long-term return incentives instead of short-term leveraging and speculation and where investors and borrowers can count on long-term stability and are advised in their best interest. Business models will have to change, we need better regulation and more effective international supervision, with a holistic view on risks, combining micro- and macro-prudential perspectives.

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Economic Forecast 2009/10

Mar 31, 2009 |

Following the nosedive since autumn 2008 the German economy will soon be over the worst. Despite the prevailing uncertainties the economists at Allianz regard a recovery from mid-year as the most likely scenario. The positive boost from the stimulus packages, low interest rates and the massive drop in commodity prices are starting to have an effect.

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Economic Forecast 2009

Sep 30, 2008 |

The German economy is heading for stagnation in the second half of 2008. The economic engine had already stalled in the second quarter. In the fall the sentiment indicators clouded over further mainly due to the financial market crisis, and the “hard data“ also provide little cause for optimism. However, assuming that the financial market crisis gradually loses its sting in the early months of 2009, we see good prospects for a pickup in the economy next year.

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Commodity market correction – back to earth with a bump?

Sep 10, 2008 |

The long-running commodity boom came to an abrupt end in the summer. Previously, prices had been vaulting from record to record in ever shorter intervals, in the end seeming to defy fundamental factors. Now our expectations have been confirmed and disillusionment has set in. Within the twinkle of an eye commodity prices slid on a broad front. Has speculation had the wind taken out of its sails? What were the triggers, how far can the correction go?

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Turkey: Sturdier than thought

Aug 27, 2008 |

The positive Constitutional Court ruling for the government and the AKP removes considerable uncertainty from the country. The economy will benefit from this. Other challenges remain, e.g. the international capital markets have hit choppy waters in the wake of the subprime crisis in the US. How will Turkey accomplish the balancing act between the tricky domestic political situation and the confidence of international investors upon which it relies given its substantial foreign capital requirements?

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China: Will the lights go out after the Olympics?

Aug 27, 2008 |

For years now China’s economic momentum has been cracking all records. But it is now increasingly being mooted that China could be hit by a sharp slump in growth after the Olympic Games. Is the Chinese economy heading for a hard landing?

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Russia: Beyond the oil boom

Jun 26, 2008 |

Russia‘s economic growth exceeded 8 % in 2007, almost reminiscent of Chinese growth rates. No one, including ourselves, had expected such economic momentum. The economic success is attributable primarily to the surge in energy prices which, albeit in aweaker form, have propelled aggregate demand. But to attribute the booming economy solely to oil and gas would certainly overlook other factors. In Russia‘s major cities, the private service sector is flourishing - not surprisingly, given the country‘s great need to recover lost ground. And, as is currently the case in nearly every emerging market, the construction industry is booming.

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Russia: Beyond the oil boom

Jun 26, 2008 |

Russia‘s economic growth exceeded 8 % in 2007, almost reminiscent of Chinese growth rates. No one, including ourselves, had expected such economic momentum. The economic success is attributable primarily to the surge in energy prices which, albeit in aweaker form, have propelled aggregate demand. But to attribute the booming economy solely to oil and gas would certainly overlook other factors. In Russia‘s major cities, the private service sector is flourishing - not surprisingly, given the country‘s great need to recover lost ground. And, as is currently the case in nearly every emerging market, the construction industry is booming.

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No grounds for earnings pessimism

Jun 13, 2008 |

In 2007 earnings of the 30 DAX-listed companies rose sharply. Will this positive trend continue this year? In our Working Paper “No grounds for earnings pessimism” we come to the conclusion that, after four years of brisk increases, the trend in 2008 is likely to be more moderate. But it is encouraging that, even in such a tempestuous year as 2008, the upward trend in earnings will probably not be interrupted.

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New dawn in Africa

Jun 11, 2008 |

There are growing signs that the economy in Africa is taking off. This is all the more encouraging given the many disappointments in the continent‘s recent economic past. Natural catastrophes, famine, civil wars, corruption and excessive debt threw sub-SaharanAfrica behind other developing regions and prompted international companies to avoid the continent when developing their business strategies. Temporary glimmers of hope, e.g. the adoption by a number of countries of a market economy following the collapse of the Soviet Union, were generally followed by disappointment, with deteriorating external conditions - such as a collapse in commodity prices - frequently standing in the way of an upswing. Is the latest germ of economic recovery likely to experience the same fate? Or do key factors suggest that the sub-Saharan African economy will latch on to the momentum of Asia and Latin America and that emerging markets will develop from the African developing nations? In the course of this study we will weigh up the negative and the positive factors and attempt to derive from them the long-term trends of economic growth.

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