After the economic slump of the last three years, a slight upswing is again expected for 2004.

In its prognosis for 2003/2004, the panel of experts involved in appraising economic developments has forecast a 1.7% increase in gross domestic product. The basis for the expected growth is an economic revival emerging in Europe and the U.S.; it could manifest itself in rising export orders. An additional key role for the German economy would be a resurgence in domestic demand. This, however, would only be possible if the uncertainty on the part of consumers and investors could be put aside. Rapid implementation of the reforms planned by the German government for the beginning of 2004 is considered to be an essential condition for this development.

In fiscal year 2003/04, the economic climate in our sector will also be marked by significant changes and mounting competition in the evolving electric power and gas markets. We are expecting electricity rates and prices to continue rising – particularly in anticipation of higher public charges. A key factor will also be the establishment of a State regulatory agency. We assume that the importance of reliable, uninterrupted electric power service has been recognised under the impact of the recent blackouts in neighbouring countries and in the U.S. and that future investments in distribution grids will not be impeded or even jeopardised by unduly massive interference. Moreover, we will welcome any strengthening of market forces.