Ifo: World eco­nomic cli­mate suf­fers set­back in Q3

Financial Mirror (Cyprus) - - FRONT PAGE -

The Ifo In­dex for the world econ­omy fell by 4.5 in­dex points to 86.0 in the third quar­ter, dip­ping to its low­est level in over three years at ten in­dex points be­low its longterm av­er­age. These re­sults, by the Mu­nich-based the Ifo World Eco­nomic Sur­vey (WES), con­trast with the improvement seen last quar­ter.

Ex­perts’ as­sess­ments of the cur­rent eco­nomic sit­u­a­tion re­main un­favourable, while their eco­nomic ex­pec­ta­tions are far more neg­a­tive than last quar­ter. Sen­ti­ment in the world econ­omy is sub­dued. Ac­cord­ing to WES ex­perts, last quar­ter’s up­ward trend ground to a halt in nearly all re­gions. In Europe in par­tic­u­lar the eco­nomic cli­mate clouded over in the wake of the Brexit vote. The only ex­cep­tions to this rule were the East­ern Euro­pean EU coun­tries, where the cli­mate bright­ened.

In Asia the cli­mate in­di­ca­tor fell to its low­est level in seven years. In North Amer­ica the in­dex was only slightly higher than its long-term av­er­age. There was, how­ever, an improvement to the eco­nomic cli­mate in Latin Amer­ica and the CIS states, although the in­dex rose from a very low pre­vi­ous level.

Av­er­age short-term in­ter­est rates world­wide are ex­pected to re­main al­most sta­ble over the next six months, while long-term in­ter­est rates will in­crease in the sec­ond half of 2016. The US dol­lar is ex­pected to strengthen over the next six months.

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