Forecast

Macroeconomic development

Overview: Gross domestic product growth below 3 percent with mixed regional developments expected

We expect 2012 to bring a general slowdown in economic growth, but without a global collapse such as experienced in the crisis year 2008/2009. Based on the data provided by Feri EuroRating Services1, we expect gross domestic product to rise by less than 3 percent.

2012 should again see the emerging regions undergo robust economic expansion, supported in particular by developments in Russia and China. For Asia (excluding Japan) we expect an increase in economic output of around 6 percent, while that of Latin America is likely to be about 4 percent. Eastern Europe should grow by around 3 percent, while expansion of the economies in the Africa/Middle East region is anticipated at roughly 4 percent.

We expect the industrialized countries to grow 1.5 percent. North American GDP is likely to expand 2 percent. Western Europe’s growth should be less than 1 percent, that of Japan 2 percent.

Raw material prices: Moderate rise in price level

With raw material prices having consolidated at a high level during the second half of 2011, we expect them to rise moderately in 2012. In the previous year, we were confronted with a high degree of volatilityMeasure of fluctuation and variability in the prices quoted for securities, in interest rates and in foreign exchange rates.
in the procurement markets. For 2012, we expect uncertainties in relation to raw material price developments. We also anticipate that logistics services will become more expensive.

Currencies: No major changes

We do not expect any material change in the euro exchange rate versus the US dollar, with the annual average for 2012 likely to be around 1.41 US dollars. However, this is based on the assumption that the debt crisis in Europe will not increase in severity and that a political solution will be found. Moreover, based on these assumptions, we expect that currencies of importance for Henkel from the emerging regions, such as the Russian ruble, the Mexican peso and the Polish zloty, will moderately appreciate in this economic climate.

Our forecasts are based on the following exchange rates:

Average exchange rates versus the euro
 

2011

20121

Chinese yuan

8.99

8.69

Mexican peso

17.31

16.40

Polish zloty

4.13

3.91

Russian ruble

40.91

40.30

US dollar

1.39

1.41

1 Forecast.

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Inflation: Slight increase in global price indices expected

According to data supplied by Feri EuroRating Services, global inflation is forecasted to be around 4 percent. While we can expect a continuing high degree of price stability for the industrialized countries with the figure at 2 percent, the inflation rate of the emerging regions is likely to average around 6 percent.

1 As of January 2012.