World economy: Climate indicator falls slightly

In October 2006 the Ifo Institute conducted its 94th Ifo World Economic Survey (WES) among 1060 economic experts of multinational enterprises and institutions in 89 countries. The results show a slight fall in the Ifo indictor for the world economy climate in the fourth quarter of 2006. The drop in the climate indicator is exclusively due to less confident expectations for the next six months. In contrast, the judgments of the current economic situation improved for the fifth time in succession, reaching a six-year high. With the expected slow-down of world economic growth in the course of the next six months, the World Economic Survey signals only a moderate cooling of economic activity. Price expectations for 2006 worldwide were revised downwards to a slight extent. In light of this reduced danger of inflation and with the expected economic slowdown, fewer WES experts than in the previous survey predict further hikes in interest rates.