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Embargo: Thursday, 13 February 2014, 10am GMT
Ifo World Economic Climate
Results of the Ifo World Economic Survey (WES) of the 1st quarter 2014
Ifo World Economic Climate Continues to Brighten
The Ifo Indicator for the world economic climate continued to rise. Assessments of the
current economic situation were more positive than three months ago. The six-month
economic outlook remains bright. The world economy is expected to gain momentum
in the months ahead. Caution, however, must be exercised in interpreting these
assessments since they do not reflect the turbulence seen in the currency markets of
emerging economies since the end of January.
Positive signals mainly emanated from North America, and especially from the USA. The
economic climate indicator rose sharply due to additional positive assessments of the current
economic situation, as well as more favourable economic expectations. The economic
climate also improved in Europe, primarily thanks to less negative assessments of the
economic situation. Expectations for the next six months remain confident. In contrast to the
last WES survey, on the other hand, there are few indications of the economy gaining any
momentum in Asia. Although assessments of the current economic situation in the region
remained satisfactory, economic expectations – although still clearly positive – were scaled
back slightly.
Inflation expectations for 2014
inflation rate of 3.2% last year.
assessments of trends in interest
largely stable on average over the
rise. On worldwide average, more
dollar over the next six months.
are 3.3% on worldwide average, versus an estimated
There was also very little change in WES experts’
rates: while short-term interest rates look set to remain
next six months, long-term interest rates are expected to
economic experts expect to see value growth in the US
In the WES special question on the anticipated impact of the tightening of US monetary
policy (tapering), experts worldwide expect an increase in long-term interest rates in their
home countries. The dampening effect on the economy, however, is expected to be limited.
Euro area countries in particular expect tapering to have only a moderate effect on shortterm capital flows from abroad, the EUR/USD exchange rate and GDP growth. The experts
surveyed in emerging economies, by contrast, expect their domestic currencies to devalue,
coupled with a drop in foreign capital flows. Overall, however, BRICs and the group of
emerging economies also expect only moderately negative growth effects. Contrary to
widespread concerns, countries on the periphery of the euro area expect to be less impacted
by tapering on balance than those in the core.
Hans-Werner Sinn
President of the Ifo Institute
World Economy (Index, base year: 2005 = 100)
Quarter/year
Climate
Situation
Expectations
I/2012
82.4
84.1
80.7
II/2012 III/2012 IV/2012
95.0
85.1
82.4
87.9
78.5
76.6
101.8
91.2
87.7
I/2013
94.1
80.4
107.0
II/2013 III/2013 IV/2013
96.8
94.1
98.6
84.1
82.2
84.1
108.8
105.3
112.3
I/2014
103.2
91.6
114.0
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. The January 2014 survey received
responses from 1,121 experts in 121 countries.
A detailed regional analysis appears in the quarterly journal: CESifo World Economic Survey. This press
release contains advance information on the most important results.
www.cesifo-group.de
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Fig. 1
Ifo World Economic Climate*
140
2005=100
130
120
110
100
90
80
70
60
long-term average 1998 –2013 (95.5)
50
40
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
* Arithmetic mean of judgement about the present and expected economic situation.
Source: Ifo World Economic Survey (WES) I/2014.
14
©
Fig. 2
Economic Situation and Expectations
World Economy
good/
better
by the end of the
next 6 months
satisfactory/
about
the same
bad/
worse
at present
98
99
00 01
02
03
04
05 06 07
Source: Ifo World Economic Survey (WES) I/2014.
www.cesifo-group.de
08
09
10
11
12 13
14
©
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Fig. 3
North America
140
Economic Climate*
2005=100
130
120
110
100
90
80
70
60
long-term average 1998 – 2013 (90.1)
50
40
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
* Arithmetic mean of judgement about the present and expected economic situation.
Source: Ifo World Economic Survey (WES) I/2014.
14
©
Europe
150
Economic Climate*
2005=100
140
130
120
110
100
90
80
70
60
50
long-term average 1998 – 2013 (101.6)
40
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
* Arithmetic mean of judgement about the present and expected economic situation.
Source: Ifo World Economic Survey (WES) I/2014.
14
©
Asia
140
Economic Climate*
2005=100
130
120
110
100
90
80
70
60
50
long-term average 1998 – 2013 (90.4)
40
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
* Arithmetic mean of judgement about the present and expected economic situation.
Source: Ifo World Economic Survey (WES) I/2014.
Climate
(2005=100)
North America
Europe
Asia
I/2012
www.cesifo-group.de
87.9
81.6
74.6
II/2012 III/2012 IV/2012
95.4
96.1
90.4
81.2
86.4
83.3
80.3
80.6
81.6
I/2013
86.2
90.3
97.4
13
14
©
II/2013 III/2013 IV/2013
87.0
93.2
106.1
93.7
99.0
89.5
88.7
109.7
98.2
I/2014
102.1
116.5
97.4
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