Macroeconomic outlook

Economic and sector-specific developments can have a significant influence on the operating and financial performance of the Lufthansa Group.
The following forecast for the course of business is
therefore based on assumptions about the development of the wider economy and the sector. These assumptions are described below. The Lufthansa Group continually monitors the development of this operating environment so that it can respond as quickly and comprehensively as possible to any changes.

Only slight economic growth expected in 2024

According to data from Global Insight, global economic growth of 2.3% is forecast for 2024, compared with growth of 2.7% the year before. The European economy is only predicted to grow by 0.7% (previous year: 0.6%). The expected growth rate for Germany of 0.3% is lower (previous year: -0.2%).

Further economic developments in 2024 will depend on the extent to which initial success in fighting inflation leads to interest rate cuts, and on further developments in the Russian war of aggression against Ukraine and in the Middle East conflict.

  Forecast 2023 to 2027 compared with the previous year
in % 2023 2024 2025 2026 2027
World 2.7 2.3 2.6 2.7 2.7
Europe 0.6 0.7 1.7 1.8 1.7
Germany -0.2 0.3 1.3 1.5 1.5
North America 2.3 1.6 1.5 1.4 1.4
South America2) 2.2 1.6 2.7 2.9 3.1
Asia / Pacific 4.5 4.1 4.1 4.1 4.0
- China 5.4 4.7 4.5 4.5 4.5
Middle East 1.0 2.1 2.5 3.6 3.1
Africa 3.1 3.3 4.0 3.9 4.1
Source: Global Insight World Overview as of 15.01.2024
1) Forecast.
2) Excluding Venezuela.

Reaction of central banks to inflation trends

Exchange rates in the euro area will depend largely on the inflation rate and the resulting reactions of the central banks. Both the European Central Bank and the US Federal Reserve will continue to pursue the goal of inflation reduction and will cut interest rates again to limit the risk of deeper recessions when the desired level of inflation has been reached.

Analysts expect the euro to strengthen slightly against the US dollar on average in 2024, to fall against the Japanese yen and to move sideways against the other major currencies.

If it becomes apparent that inflation in the euro area is falling to the target of 2%, the expectation is that the European Central Bank will ease its monetary policy again by adjusting the interest rate. The first interest rate cut is expected for the first half of 2024. The Fed, the US central bank, is also expected to cut interest rates in the same period.

Futures markets indicate slight decline in oil prices

Prices are expected to fall again slightly on the futures market. As of 31 December 2023, futures contracts for delivery in December 2024 were trading at USD 75.00/barrel, and for delivery in December 2025 at USD 72.01/barrel. However, market participants still expect volatility to remain high and have identified a high degree of forecast uncertainty due to the Russian war of aggression against Ukraine and the Middle East conflict.

Lufthansa Group Annual Report 2023