World economic climate improved

In October 2005 the Ifo Institute conducted its World Economic Survey (WES) for the 90th time; 1,100 economic experts at multinational enterprises and institutions in 91 countries participated. The results show an improvement of the world economic climate for the first time since April 2004. The improvement applied only to the assessments of the current economic situation, however. The expectations for the coming six months weakened slightly. Overall, the World Economic Survey signals a continuingly robust international economy. The slight weakening in the world economy in 2004 was presumably only temporary, and WES experts now expect an acceleration of economic growth. As a result of the rising inflation expectations, the WES experts anticipate further hikes in interest rates, especially in North America and Asia but also in Western Europe. The US dollar is regarded as adequately valued, after having been seen as undervalued for two years. The euro and the British pound were appraised less frequently as overvalued than in the previous surveys.