Inflation, rise in interest rates and geopolitical uncertainty postpone a thorough recovery of the global economy
In 2023, the global economy suffered from the direct and indirect effects of the war in Ukraine and the conflict in the Middle East. These effects contributed to the high rates of inflation along with the loosening of fiscal and monetary policies during the coronavirus pandemic. The tightening of monetary policy up until the third quarter had a lasting weakening effect on the economy and global trade and is a significant factor in the caution seen in investments and consumer behavior. Although the energy markets settled down to a certain extent compared with the previous year, gas and electricity prices – especially in Germany and the rest of Europe – remained well above the level from before the war in Ukraine and thus impeded any thorough recovery of the global economy following the pandemic. Even though the key interest rates of leading central banks could have reached their peak in the fall of 2023, a loosening of monetary policy is not likely until the middle of 2024.
The data mentioned in the following paragraph describing the economic conditions stem from S&P Global Market Intelligence.
Global GDP growth continued to weaken from 3.1% in 2022 to 2.7% in 2023. GDP growth in industrialized companies fell from 2.6% to 1.6%, primarily due to the eurozone, which was impacted by the war in Ukraine and whose growth downright collapsed from 3.5% to 0.5%. Following growth of 1.9% in the previous year, Germany even fell into the slightly negative growth (–0.2%) in the year under review. By contrast, the United States bolstered economic activity from 1.9% to 2.4% with a very expansive fiscal policy. At the same time, emerging markets experienced a recovery from 3.7% to 4.2%, with a significant rise in China from 3.0% in 2022 to 5.4% in 2023 being a major contributor.
Growth in global industrial production and global trade significantly hampered
In 2023, growth in global industrial production and global trade remained significantly hampered. Following growth of 7.0% and 2.8% in 2021 and 2022, respectively, industrial production grew by only 0.7% in 2023. The figures for global trade reflect this slowdown, with exports growing by a mere 1.1% compared with 10.9% in 2021 and 5.6% in 2022. For the logistics sector, this cooling comes with more moderate demand and declining volumes. In the B2B segment, challenges from partly excess inventories and dwindling demand persisted, which resulted in a sustained alignment of freight rates and transport capacities. Even toward the end of 2023, there was no significant recovery in demand, which underscores the ongoing global economic recession. For DHL Group, these developments manifested themselves in the form of a decline in revenue and earnings figures.
E-commerce with structural growth dynamic
In spite of the overall uncertainty of the economy, continuing inflation and the slowdown in global trade, the e-commerce sector confirmed its structural growth dynamic. Following a preliminary normalization in 2022, e-commerce-based business once again experienced growth in 2023, which confirms the long-term change in consumer behaviors. DHL Group is making use of this dynamic to expand and improve its e-commerce logistics services.
Legal environment
The Group provides some of its services in regulated markets. Many of the postal services rendered by Deutsche Post AG and its subsidiaries (particularly the Post & Parcel Germany division) are subject to sector-specific regulation under the Postgesetz (PostG – German Postal Act). Information regarding this issue and legal risks is contained in note 45 to the consolidated financial statements.
