Eurozone's economic climate worsens in Q3

13 August 2008 17:37  [Source: ICIS news]

TORONTO (ICIS news)--The economic climate in the eurozone has worsened in the third quarter for the fourth consecutive time and the near-term outlook is gloomy, the Munich-based Ifo Institute for Economic Research said on Wednesday.

 

The institute’s Ifo "economic climate indicator" fell to 61.9 in the third quarter, down from 111.9 year on year and down from 76.3 month on month.

 

The decline was the result of less positive assessments of the current economic situation as well as clearly more pessimistic expectations for the coming six months, Ifo said.

 

The climate further clouded over in nearly all eurozone countries, the institute said.

 

Particularly negative assessments of the current economic situation came from Italy, Spain, Portugal, Ireland and Belgium, while assessments for Finland, Austria, Germany and the Netherlands were more favourable.

 

At 3.6%, inflation expectations exceeded the European Central Bank target and experts anticipated an increase in key lending rates in the coming six months, Ifo said.

 

Meanwhile, the US dollar was undervalued versus the euro and should strengthen in coming months, Ifo said.

 

The Japanese yen and the British pound were also undervalued vis-a-vis the euro, it added.

 

The Ifo indicator is based on responses from 273 economic experts.

 

($1 = €0.67)

 

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By: Stefan Baumgarten
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