99 potentials. The development of our sustainable hypo_blue product range will be consistently continued this year. We will continue to pursue this path of mutual trust. We intend to continue expanding our market leadership and our excellent market position in the defined target groups – in housing construction and among institutional customers, SMEs, doctors, freelancers and private clients. We are convinced that HYPO Oberösterreich is well positioned as a strong regional bank and that its successful development and expansion of business will continue, despite all existing challenges. Linz, dated 5 April 2022 Management Board of HYPO Oberösterreich Klaus Kumpfmüller Thomas Wolfsgruber Annual Information Outlook Outlook The war in Europe, resultant increase in geopolitical tension between world powers, exploding energy prices, increased inflation and a still unresolved Covid-19 pandemic also portend a significant reduction in forecasted global economic growth. The European Central Bank (ECB) will thus need to shape its monetary policy to contain inflation but also to continue supporting companies and member states by means of appropriate liquidity. It may therefore be assumed that interest rates in Europe will not rise sooner than the end of 2022. HYPO Oberösterreich, despite all the above risks, remains fundamentally positive about the 2022 financial year, especially considering the fact that no direct business connections exist to the Russian market or to Russian companies. Even the so-called "second-round effects" are considered quite manageable. We, as the bank for the state of Upper Austria, have a close relationship with the economy and people of our federal state. The strong focus on our home market and consistent implementation of the HYPO Added Value strategy are our basis for successful business development. We consider our strategic focus on sustainability not only socially responsible, but we also see in it great business The economic outlook for 2022 would have been quite positive, both globally and nationally. The Russian war of aggression against Ukraine, however, constitutes both a humanitarian catastrophe and a dramatic change in the global economic situation. Although the far-reaching economic sanctions imposed against Russia will affect the aggressor primarily, they will also have a general economic impact that the Austrian economy cannot hope to escape. Inflation will also continue to rise as a result of this crisis. Driven primarily by galloping energy prices. The Economic Research Institute (Wifo) and the Institute for Advanced Studies (IHS) have therefore in their current end of March 2022 forecast significantly revised the economic outlook for Austria downwards. Economic growth of only 3.9 percent (Wifo) and 3.6 percent (IHS) is now expected for this year. The forecast at the beginning of 2022 was for just over five percent. Both the Wifo and the IHS emphasised that annual 2022 growth was still based on excellent first quarter developments. The institutes, however, expect a significant decline for the rest of the year, possibly even a recession in the industrial sector. With individual concepts and a wide range of services we accompany our customers in achieving their financial goals.
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