11 Nov 2009
Ifo World Economic Climate 19 Nov 2009
The Ifo Economic Climate for the euro area improved in the fourth quarter of 2009 for the third time in succession. The rise in the Ifo indicator is primarily the result of more favourable expectations for the coming six months, but also the assessments of the current economic situation have improved slightly. This shores up hopes that the recovery in the euro area economy will continue in the first half of 2010.
The expectations for the coming six months improved in all countries of the euro area. The economic expectations are especially optimistic in Italy, Germany and the Netherlands. In Spain and Greece, however, the WES experts remain cautious in their expectations although less so than in the previous quarter. In the entire euro area it is only in Ireland where a further worsening of the economy is anticipated in the coming six months. In nearly all countries in the euro area the current economic situation, however, is still appraised as quite unfavourable.
The inflation expectations for 2009, at 0.7% on average for the year, are clearly below the target of the European Central Bank. In the course of the coming six months, a higher rate of inflation is expected. An increasing number of WES experts anticipates an increase in key interest rates in the coming half year. The anticipated rise in capital market interest rates in the coming six months is seen as even higher.
The US dollar and the British pound are seen as clearly undervalued vis-à-vis the euro. Nevertheless, the WES experts do not expect the US dollar to appreciate over the euro in the coming six months. Instead, they anticipate a general stabilisation at the present level.
Hans-Werner Sinn, President of the Ifo Institute for Economic Research at the University of Munich
Press release as PDF-file
Index 1995 = 100
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The Ifo World Economic Survey (WES) investigates world-wide economic trends by polling transnational as well as national organisations in different 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 19 November 2009. The 4th quarter 2009 euro area results, which are published here in advance, are based on the responses of 265 economic experts. WES is conducted in co-operation with the International Chamber of Commerce (ICC) in Paris.
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