The global economy recorded real growth of only 2.8% in 2013, which was 0.3 percentage points lower than in 2012. This was the third year in a row of declining growth and, except for the crisis years 2008/2009, was the slowest rate of economic growth since 2002. Austria recorded real economic growth of only 0.3%. After a slight recession in the first quarter and no change in the second quarter, the two quarters of the second half of the year each showed growth of approximately 0.5%. Under these difficult conditions, the Austrian insurance market grew by 2.0% in 2013.
Economic conditions were also difficult in VIG's other core markets. Croatia and the Czech Republic had to battle with recessions, while real economic growth was less than 1% in Hungary, Slovakia and the Ukraine. In Poland, one of the economic engines of the CEE region, economic growth is anticipated to have hit its lowest point at 1.3%. One of the reasons for this is growth in the Eurozone. Gross domestic product rose by only 0.5% in Germany in 2013, while in the Eurozone as a whole, economic activity even declined by 0.4%.
Some of the reasons for this included global trade growth of less than 3%, which continues to be very moderate, simultaneous austerity policies in the EU and the USA, and record unemployment of 12.3% in the Eurozone. The US Federal Reserve and ECB kept interest rates constantly low in 2013, which put life insurance under particular pressure worldwide. At the same time, however, the central banks' goal of stimulating lending to private households and investors achieved only a very small level of success.
Positive trends, such as the slow consolidation of government budgets in a number of European crisis countries, individual cases of reduced unemployment, or a recovery of lending in Europe were not visible until the 2nd half of 2013.