Outlook

Economic development

The downturn in the industrial sector is expected to continue in the first half of 2025. In contrast, the service sector, which accounts for a significantly larger share of the economy, is likely to grow strongly. For Germany and Austria, the International Monetary Fund (IMF) is forecasting an end to the recession by 2025, driven by rising incomes, higher savings rates and a stable labour market. If consumer sentiment improves, growth rates could even exceed the currently forecast figures of 1.1 per cent for Austria, 0.3 per cent for Germany and 1.0 per cent for the eurozone.

The labour market remains robust with an unemployment rate of around 6.5 per cent in the eurozone, while in Austria the figure is likely to settle at 5.3 per cent in 2025 according to the IMF.

The European Central Bank (ECB) will still need to help support the economy by cutting interest rates. The market expects further cuts totalling 100 basis points by the end of 2025, which would ultimately bring the discount rate to between 1.5 and 2 per cent.

Significantly stronger economic growth is expected in the eastern EU countries in 2025. Poland could grow by 3.5 per cent, Hungary by just under 3 per cent and Czechia by 2.3 per cent. Inflation in these countries is also likely to stabilise. According to current estimates, inflation in Poland and Hungary is likely to hover around the 4 per cent mark, while in Czechia it could even be as low as 2 per cent.

Nevertheless, risks remain, particularly due to geopolitical uncertainties such as the Ukraine conflict, tensions in the Middle East and possible disruptions in the Suez Canal. Economic development will also depend heavily on the tariff measures announced by the USA. Depending on their extent, they could dampen the global economy and increase inflation. The Fed will therefore probably only make one or two interest rate cuts totalling a maximum of 50 basis points. Against this backdrop, the US economy is likely to grow at a rate of 2.7 per cent in 2025 – with an inflation rate of just over 2 per cent.

In Europe, the issue of budget consolidation will remain in the spotlight, particularly in countries such as France, Italy and Austria.

Whether the stock markets can continue their strong performance of 2024 is questionable in view of high valuations, particularly in the USA. However, given the interest rate cuts, rising growth and tax cuts in the USA, the conditions are generally favourable. However, a positive trend is expected for the European bond markets, with yields falling slightly by the end of the year.

Business outlook

For the 2025 financial year, the first of our enhanced strategic programme “UNIQA 3.0 – Growing Impact”, our focus remains on improving our core underwriting business and profitability in Austria as well as on profitable growth in our CEE markets. Our expectations of strong growth above GDP are based on both targeted sales activities and restatements in connection with inflation and index developments.

Due to the unstable geopolitical and economic conditions and the trend towards increasing weather-related damage, any forecast for future business development is subject to uncertainty. Subject to significant negative influences from natural catastrophes and distortions on the capital market, UNIQA is targeting a further improvement in profitability for 2025.

With a target payout ratio of 50 to 60 per cent, we continue to strive for a progressive and attractive profit-sharing scheme for our shareholders.