Ifo World Economic Climate

Transcription

1 Embargo: Wednesday, 13 August 2014, 9am GMT Ifo World Economic Climate Results of the Ifo World Economic Survey (WES) of the 3 rd quarter 2014 Ifo World Economic Climate Brightens Slightly The Ifo Index for the world economy rose to points from points in the previous quarter. Both assessments of the current economic situation, as well as the economic outlook, improved somewhat versus April. World economic activity remains on the rise. The risks, however, have grown: almost three quarters of the WES experts surveyed believe that rising energy prices and supply shortages pose a moderate to high potential threat to the world economy. The driving forces behind the world economic climate result primarily from North America with an increase of 3.4 points in the Ifo index (USA: 5.9) and Asia with a plus of almost 10 points. The index for Europe, by contrast fell (-0.9), and particularly sharp decreases were reported in the Near East (-5.7) and Latin America (-5.4 points). In Latin America the Ifo index fell to its lowest level since the end of According to a WES special question on the expected negative impact of the Ukraine conflict, experts, especially in direct neighbouring countries, cited negative effects in terms of trade channels, as well as energy prices and supply. Experts in geographically distant regions like Latin America, Oceania, Asia and Africa, by contrast, reported that the impact of the conflict is relatively minor. Inflation expectations remain unchanged on worldwide average at 3.2 percent. While the expected price increase has declined steadily for over a year in Europe, price expectations in North America and Asia were upwardly revised. The experts surveyed expect long-term interest rates to continue to rise over the next six months, although somewhat less frequently than in the last survey. In their opinion, short-term interest rates should remain largely stable for the next six months. The US dollar and the Japanese yen are perceived to be undervalued on worldwide average; while the euro and the British pound are seen as overvalued. Overall, experts expect the US dollar to strengthen in the next six months. Hans-Werner Sinn President of the Ifo Institute World Economy (Index, base year: 2005 = ) Quarter/year III/2012 IV/2012 I/2013 II/2013 III/2013 IV/2013 I/2014 II/2014 III/2014 Climate Situation Expectations Since 1981 the Ifo Institute has conducted a quarterly survey in numerous countries on business cycle developments and other economic factors in the experts home countries. The July 2014 survey received responses from 1,146 experts in 121 countries. A detailed regional analysis appears in the quarterly journal: CESifo World Economic Survey. This press release contains advance information on the most important results. 1/5

2 Fig. 1 Ifo World = long-term average (95.5) Fig. 2 Economic Situation and Expectations World Economy good/ better by the end of the next 6 months satisfactory/ about the same bad/ worse at present 2/5

3 Fig = North America long-term average (.1) = 2005= Europe long-term average (101.6) Asia long-term average (.4) Climate (2005=) III/2012 IV/2012 I/2013 II/2013 III/2013 IV/2013 I/2014 II/2014 III/2014 North America Europe Asia /5

4 Fig. 4 To what extent is your country negatively affected by the Ukraine conflict? Strong Moderate Weak Not at all No data If your country is affected, which channels have the greatest impact? Exports Energy Prices Financial Markets Energy Supply FDI Political Stability Imports 0 10% 20% 30% % % Note: Ranking by frequency of enumeration by economic experts; answers have been weighted by experts impact assessments and countries weight in foreign trade. 4/5

5 Assessments of potential risks for the world economy Rising Energy Prices Threat to Energy Supplies Military Escalation Freezing Trade Relations Financial Market Contagion 0 25% % 75% % high risk moderate risk low risk no risk Note: Ranking by assessments of risk factor from high risk to no risk. 5/5