Fri, Aug 10, 2018 - Page 12 News List

IFO reports fall in economic climate

By Crystal Hsu  /  Staff reporter

The world’s economic climate deteriorated sharply this quarter, the Ifo Institute’s quarterly World Economic Survey showed yesterday, with the indicator dropping from 16.5 points to 2.9 points.

That is basically the same level as in the first quarter of last year, the German institute said.

Although the assessments of the 1,200 experts covering 120 nations showed the current economic situation has worsened, they nevertheless remain at a high level, the institute said.

The experts’ economic expectations were considerably scaled back, dropping to their lowest level since the end of 2011, Ifo said, describing the world economy as “slowing to a crawl.”

The economic climate deteriorated in nearly all regions with assessments of the current economic situation and expectations declining significantly in the EU and Asian emerging and developing economies, including China, and in Latin America, it said.

Economic expectations also cooled down in the US, even though assessments of the current economic situation improved, it said.

However, the assessments for the Middle East and North Africa showed a pick-up, it said.

Developments in world trade were dominated by the ongoing conflict over tariffs, with the majority of experts predicting lower exports moving forward, particularly in the US and China, it said.

Survey respondents also expect private consumption to stagnate, as global investment activity weakens drastically, Ifo said.

Experts were conservative about Taiwan’s economic situation for the next six months, while they held a positive view on the current state, said the National Development Council, which helps gather information for the Taiwan portion of the quarterly survey.

Expectations of economic development and private consumption turn negative from positive territory for Taiwan, the council said.

However, experts are looking at capital spending increase in coming six months, it said.

The outlook for the nation’s exports and imports remains comfortably above the neutral threshold, but the pace of growth may ebb significantly, it said.

The US dollar could gain further strength against the local currency, while share prices could take a hit, the council said.

Consumer prices might climb higher on the back of oil and raw material price hikes, it said.

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