ifo Institute

Andreas Mühlbauer,

Global economic climate deteriorates

The ifo World Economic Climate has deteriorated again. The indicator fell from 16.5 to 2.9 points in the third quarter and is therefore roughly back at the level of the first quarter of 2017.

Although the experts' assessment of the situation deteriorated significantly, it remains at a high level. Expectations, on the other hand, fell sharply once again and are at their lowest level since the end of 2011. The global economy is only moving with the handbrake on.

According to ifo , the economic climate deteriorated in almost all regions. Both the assessment of the current situation and expectations fell significantly in the European Union, the Asian emerging and developing countries, including China, and in Latin America. Expectations also cooled in the USA, while the assessment of the situation improved. In the CIS states and in the Middle East and North Africa, both the assessment of the situation and expectations improved.

The development of global trade is characterized by the current tariff dispute, with the majority of experts now predicting lower exports in the coming months, particularly for the USA and China. This is accompanied by a considerable drop in expected global investment activity. In addition, the respondents expect private consumption to stagnate.

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