A quarterly global survey says the world’s economic climate has begun to improve after two quarters of decline but remains significantly below its long-term average.
The latest World Economic Survey, published Thursday by the International Chamber of Commerce and the Munich-based Institute for Economic Research, polled 1,129 economic experts from business and academic institutions in 120 countries to assess current and expected economic developments.
Appraisals of the current situation fell to 84.1 from 86.0 in the last previous ICC-Ifo survey in October 2011, but the six-month outlook improved to 80.7 from 71.9.
“The latest results confirm that the cyclical downswing of the world economy is still under way,” said Gernot Nerb, Ifo director of economic research. “But they also confirm the now-prevailing view that the downswing will be relatively short and moderate in most countries and not devolve into a recession.”
The survey noted a deteriorating economic climate in Western Europe while the continent’s six-month outlook has brightened but remains uncertain. Nerb said the prevailing view is that a eurozone collapse and return to national currencies can be avoided.
“This view, coupled with the brightening economic outlook in some other parts of the world, particularly in the U.S., allows us to reasonably hope that the Western European economy will start picking up in the second half of 2012,” he said.
However, the economic climate in Asia points to a slowdown, ICC Secretary General Jean-Guy Carrier said.
“In the U.S. economy, the six-month outlook is certainly more positive than it was three months ago,” said Carrier.
The inflation estimate for the beginning of 2012 decreased significantly over the end of 2011, dropping from 4 percent to 3.5 percent, the report said. Survey respondents expect short-term interest rates to remain unchanged or decrease slightly over the next six months.
In terms of currencies, the report indicates that the yen, in particular, remains over-valued. Experts also expect the dollar exchange rate to rise slightly on a worldwide average over the next six months.