Economy experts see worldwide recession - survey

20 November 2008 18:21  [Source: ICIS news]

TORONTO (ICIS news)--Germany’s Ifo economic research institute said on Thursday it believed the global economy was headed for a recession following its most recent survey of economic experts.

 

“On the whole, the survey data point to a global recession,” the Munich-based institute said.

 

The cooling of the economic climate affected not only North America and Western Europe, but also Asia, Central and Eastern Europe, Latin America and Australia.

 

Ifo’s World Economic Climate indicator fell from 73.4 points to 60.0 points, its lowest level in more than 20 year, on expectations that the economic climate would worsen in the coming six months, it said.

 

The index is based on a quarterly survey of 1,001 experts in 91 countries. Ifo conducted the survey in October with co-operation with he International Chamber of Commerce in Paris.

 

In Western Europe the economic climate indicator again worsened in nearly all countries, with the situation particularly unfavourable in Spain, Italy, Belgium and Ireland.

 

In Asia, experts’ assessments of the economies in Japan, South Korea and Taiwan were particularly unfavourable.

 

As for the US, while experts saw the economic situation there as very unfavourable, economic expectations for the coming six months were no longer quite as pessimistic as in the first half of the year, Ifo said.

 

Ifo also said the euro was expected to lose more value vis-à-vis the dollar going forward even though the overvaluation of the euro had been largely corrected in past weeks.

 

Also, a majority of experts surveyed now anticipated declining central bank interest rates, in contrast of Ifo’s previous survey.

 

Long-term interest rates were also expected to fall in the coming six months, it said.

 

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By: Stefan Baumgarten
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