Future Perspectives

Economic Outlook

Economic Outlook

 

 

Growth1 2018

 

Growth forecast1 2019

1

Real growth of gross domestic product, source: IHS Markit

2

Including about 50 countries defined by IHS Markit as emerging markets in line with the World Bank

As of February 2019

World

 

+3.2%

 

+2.9%

European Union

 

+2.0%

 

+1.5%

of which Germany

 

+1.5%

 

+1.4%

United States

 

+2.9%

 

+2.5%

Emerging Markets2

 

+4.8%

 

+4.6%

Declining growth in the global economy

Global economic growth looks set to slow in 2019 compared with 2018. In addition, the risk of a global economic downturn – triggered by an escalation of trade tensions or other factors – has increased. In the European Union, uncertainty over the form Brexit will take and political developments in a number of member states are likely to hamper the economy. In addition, Germany and France are not expected to provide any major economic stimulus. In the United States, higher tariffs in particular will probably hold back foreign trade, and the impetus from the tax cuts introduced in 2018 is expected to gradually fade. We also expect growth to weaken somewhat in the Emerging Markets as a whole. In Latin America, political uncertainty in a number of countries is likely to weigh on growth. Although Chinese economic growth has remained very high, it now appears increasingly fragile and will likely continue to slow in 2019 despite the government’s stimulus measures.

Economic Outlook – Segments

 

 

Growth1 2018

 

Growth forecast1 2019

1

Bayer’s estimate, except pharmaceuticals. Source for pharmaceuticals market: IQVIA Market Prognosis (September 2018); all rights reserved; currency-adjusted; 2018 data provisional

As of February 2019

Pharmaceuticals market

 

+5%

 

+5%

Consumer health market

 

+4%

 

+4%

Seeds and crop protection market

 

+2%

 

+3%

Animal health market

 

+5%

 

+4%

For the pharmaceuticals market, we anticipate that growth in 2019 will match the prior-year level (5%). We expect minor declines in growth rates in the Americas, Europe and Asia. However, we see the Japanese market returning to positive market growth in 2019. Growth drivers will likely continue to be new, high-end products and volume increases.

We anticipate that growth of the consumer health market in 2019 will match the 2018 level. The market is likely to experience rising price pressure from e-commerce and continued consolidation of the retail sector.

We expect the global seed and crop protection market to continue its positive development in 2019. In our view, the principal growth momentum will come from Latin America, mainly due to a further increase in soybean acreages, and from the Asia / Pacific region. We expect growth in North America to lag behind overall global development due to persistently low prices for agricultural commodities and to uncertainty in connection with the trade dispute between the United States and China. In Europe, growth is likely to be sluggish, held back partly by the ongoing tense financial situation for farmers and more stringent regulatory requirements.

Our base assumption for the animal health market in 2019 is for stable growth at a slightly slower pace than in 2018.

Compare to Last Year