Global economy to pick up in second half: survey

AFP ^ | 8/23/05

[Crackingham]

The slowing global economy is due for a pick-up in the second half of 2005, a quarterly survey released by the International Chamber of Commerce and the German Ifo institute showed. After five straight quarters of decline, the survey's confidence index stabilized in July. The results were based on responses by 1,051 economists in 95 countries.

A global economic climate indicator came in at 97.5, the lowest level since February 2004 but higher than a long term average of 94 between 1990 and 2004.

"That confirms the sentiment that slower economic growth since mid 2004 is only a temporary event and not the start of a decline in global economic activity," said Hans-Werner Sinn, president of the Ifo institute.

A rebound was anticipated in North America in particular, with economists revising upwards their opinions concerning the economic situation there at present and for the next six months. Estimates for growth in Asia remained stable and continued to decline for Europe, though not for the 12-nation eurozone. Conditions were expected to deteriorate however in Sweden and Switzerland, and even more noticeably in Great Britain.

Regarding the effects of a surge in oil prices, the economists were confident that overall inflation would not exceed 2.9 percent this year, unchanged from 2004.

Short-term interest rates were expected to gradually increase in the United States, remain stable within the eurozone, and decrease in Britain.