World economy shows signs of improvement
THE GLOBAL economic recovery is back on despite the Eurozone crisis, according to new survey data published yesterday.
North America is expected to see economic growth of 2.4 per cent in the next year, according to the Ifo Institute’s world economic climate indicator, while Asia is set to return to its trend rate with GDP growth of four per cent.
Expectations remain more muted in western Europe, with growth of 0.4 per cent, though respondents were less pessimistic about the outlook now than in the first quarter of 2012.
The world economic climate index rose sharply from 82.4 to 95 on the quarter, close to the long-term average of 96.7.
That performance is predicted to improve rapidly over the next six months – the expectations index jumped from 80.7 in the first quarter to 101.8 now.
The North American climate is firmly above its 91.8 long-term average at 95.4 up from 87.9 three months ago.
Asia’s climate is approaching its 90.7 average with a reading of 90.4, up from 74.6 in the first quarter.
However western Europe is still far short of its 105.7 trend rate, with a reading of 99.3, though that does represent an improvement on the 74.6 recorded three months ago.
As a result of the improving overall global momentum, Ifo economists expect a slight rise in long-term interest rates over the next six months.
They also forecast world price inflation will hit 3.6 per cent this year, up from the 3.5 per cent forecast earlier.