World sentiment drops on growth fears for slowing China and a stagnant euro area

Chris Papadopoullos
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All eyes are on slowing growth in the Chinese economy, which is weighing on sentiment
WORLD economic sentiment has dipped for the fourth quarter, with China and the Eurozone weighing on expectations.

The Ifo index – published yesterday by Ifo at the University of Munich – for the world economy fell to 95 points from 105 points for the third quarter, reaching its lowest level since the same period of last year.

It is now below its long-term average of 95.5 points.

Despite assessments of the current economic situation falling only slightly, economic expectations were downwardly revised strongly.

The Eurozone and China were particularly weak.

Data released yesterday showed that China’s economy was still not picking up speed. Industrial output growth fell to 7.7 per cent year-on-year growth in October from eight per cent in September.

Fixed investment – spending by firms on assets such as buildings and equipment – grew by 15.9 per cent year-on-year, but this was more due to a sharp dip this time last year. “With President Xi sounding relaxed about the prospect of a drop to seven per cent GDP growth, a shift in policy still seems unlikely,” said economist Mark Williams from Capital Economics.