Advance results of the Ifo World Economic Survey (WES) of 2nd quarter 2015 (06 May 2015)
Ifo Economic Climate in the Euro Area Improves Significantly
The Ifo Index for the economic climate in the euro area rose sharply to 129.2 points in the second quarter of 2015 from 112.7 points last quarter. The index rose to a level last seen prior to the outbreak of the world financial crisis and significantly above its long-term average of 106.1 points. Both assessments of the current economic situation and the six-month economic outlook brightened considerably. According to the experts surveyed, economic growth will amount to 1.5 percent this year. The euro area’s economy is experiencing a clear upturn.
The main contribution to the favourable economic situation came from Germany. However, there were also gradual improvements in the other three large euro countries – France, Italy and Spain – where assessments nevertheless remained in the negative range. Assessments of the economic situation in Greece, Ireland, Austria and Portugal, by contrast, were more unfavourable than previously. In all other member states assessments remained positive on the whole, despite isolated downward revisions.
The experts surveyed expressed growing optimism about the six-month economic outlook in most countries. Positive expectations only clouded over slightly in Finland, Italy and Spain. Scepticism on the part of experts in Greece reached levels last seen three years ago.
Experts forecast an average inflation rate of 0.6 percent in the euro area in 2015. Consumer prices are only expected to fall in Greece and Cyprus. Mid-term (2020) inflation expectations for most euro countries are 2 percent.
President of the Ifo Institute
Euro area (Index, base year: 2005 = 100)
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. This allows for a rapid, up-to-date assessment of the economic situation prevailing around the world. The full set of results will be published on 12 May 2015. The 2nd quarter 2015 euro area results, which are published here in advance, are based on the responses of 298 economic experts.