Ifo indicator for the world economic climate falls again

The Ifo World Economic Climate worsened for the fourth time in succession in the third quarter of 2008. The decline was primarily the result of more unfavourable assessments of the current economic situation, but there was also another downward revision of expectations for the coming six months. The current survey results point to a cooling of the world economy in 2008. On a worldwide average, the survey participants expect an inflation rate of 5.2%. This is a much higher rate than was surveyed last year (3.2%) and also in the second quarter of this year (4.2%). In contrast to the April survey, the WES participants – despite the ever clearer signs of a coming economic downturn – anticipate rising central bank interest rates next year. The reason is probably the strong increase in inflation expectations.