World Economic Climate Brightens Slightly
According to the Ifo World Economic Survey (WES) of 2nd quarter 2016 the world economic climate improved slightly this quarter. The Ifo Index for the world economy rose from 87.8 points to 90.5 points, thus approaching its long-term average of 96.0 points. Although assessments of the current economic situation deteriorated marginally, economic expectations were more positive than last quarter. Experts expect the world economy to grow by 2.0 percent in 2016 and its recovery remains moderate.
The downward trend in the economic climate indicator ground to a halt in nearly all regions. In North America the trend towards a recovery was particularly marked, with the indicator once again rising above its long-term average. In Asia the indicator stabilized at a low level, while it dropped in Europe, but remained above its long-term average. However, in all other regions, and especially in Latin America and the CIS states, the indicator remains below its long-term average despite improvements.
WES experts believe that both short and long-term interest rates will rise over the next six months in the USA, and expect them to remain largely stable in Europe. In Asia, and especially in China, Japan and India, experts expect interest rates to drop. The US dollar is expected to strengthen over the next six months.
Since 1981 the Ifo Institute, Munich, Germany, has conducted a quarterly survey in numerous countries on business cycle developments and other economic factors in the experts’ home countries. The April 2016 survey received responses from 1,078 experts in 116 countries. A detailed regional analysis appears in the quarterly journal: CESifo World Economic Survey.
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