World economy: downward trend continues, improvement expected

According to the 73rd Ifo Economic Survey International (ESI), the declining trend that started in Spring 2000 continued, the indicator having lost a quarter of the value at its peak of April 2000. The business expectations component of the indicator is now pointed slightly upwards, and the decline is solely attributable to assessments of the current business situation. The positive expectations of ESI participants for the coming six months show that the indicator may reach the lower turning point during the remaining months of the year. The surveyed experts forecast a 3.8% increase in consumer prices for the 79 countries included in the survey. The euro continues to be seen as undervalued. The worldwide economic downturn has enlarged the hiatus in demand almost everywhere. Correspondingly, "lack of demand" was listed at the greatest problem in front of "lack of skilled labour" and "unemployment". In Western Europe, however, "lack of skilled labour" still heads the list of problems.