Business nerves holding up well despite uncertain outlook
Despite current economic uncertainties and falling stock markets, corporate assessments of the world economic climate declined only slightly in the third quarter of this year, an international survey of business opinion showed.
The survey of more than 1,000 executives, business economists and analysts came after the two previous quarters had shown sharp rises in the climate indicator issued by the International Chamber of Commerce and the Munich-based Ifo research institute.
While expectations for the coming six months weakened, the current economic situation was judged to have improved slightly compared with survey results in May. Dr. Gernot Nerb, Ifo's Director of Business Surveys, commented: " Business nerves are holding up remarkably well, and this has to be a positive sign for the economic outlook."
Dr Nerb added: "That the decline in the world economic indicator is only moderate signals that a double-dip in the world economy is not very likely. However it does suggest that the ongoing economic recovery will have less momentum than previously expected."
Based on returns collected last month, The ICC-Ifo indicator stood at 101.1 compared with 104.7 in May, and still remained above the long-term average since 1989. Analysts ascribed the decline in the overall indicator mainly to less positive data fr om western Europe and to a lesser degree in North America.
- World currencies continue to move towards greater stability.
- Inflation is expected to slow worldwide in 2002 with consumer price inflation estimated at 3.3%.
- No sharp weakening of the US dollar is expected.
- Short and long term interest rates are expected to rise less than the spring survey suggested.