No, not that kind. We’re talking
the international economy! Who’s hot, who’s
By Coletta Kemper
The good news came across my desk in the form of a recent
joint report from the Ifo Institute for Economic Research and the
International Chamber of Commerce, which receives financial
support from the European Commission.
According to a survey of 1,030 economic experts in 90
countries around the globe, the outlook for the world economy in
the first half of this year is quite sunny. In fact, the experts
predict that 2007 will be “rosier” than 2006. The
January economic climate index already registered a robust
106.5—a 1.8 point improvement over last quarter.
The survey assesses a nation’s general economic
situation and expectations by looking at key economic indicators.
The authors say it is a useful tool since it reveals economic
trends earlier than conventional business
The current economic mood points to further economic
stabilization, the report says. Improvements were made in
all three major economic regions—Western Europe, Asia and
the U.S. Key factors contributing to this cheery picture include
recent declines in energy prices along with increasing corporate
profits and modest interest and inflation rates. Of course, all
that can change. But overall stabilization in the world economy
is percolating along at a favorable level.
The economic rebound in Western Europe continued in almost all
the euro countries, except in France, Italy, the Netherlands and
Ireland. Economic conditions in France and Italy fell below the
“satisfactory” level. The Netherlands and Ireland
declined marginally but still remain at a highly satisfactory
level. Most of the experts viewed the present economic situation
in Portugal to be “bad.” Still, the expectations for
the euro area point to economic stabilization in the first half
of 2007. The climate remains highly favorable for Nordic
countries Sweden, Denmark and Norway.
The economic climate in Eastern Europe remains satisfactory
and more or less unchanged. The regions’ economy is
expected to stabilize. The economic climate for Russia,
Kazakhstan and the Ukraine cooled somewhat. While the outlook
remains positive for the first two, the Ukraine’s state has
deteriorated and expectations remain cautious.
North America is staging a comeback after the economic
slowdown last year. The economists slightly upgraded the current
U.S. economic situation. The positive assessment of Canada
generally reflects optimistic expectations for the first half of
the year. Both countries are viewed as having a highly favorable
present economic climate.
Asia continues to boom; however, the improved view is based
entirely on positive expectations for the first six months of the
year. The current economic performance for the region remains
favorable for different reasons across countries.
India’s star continues to rise. Its rapid growth,
averaging about 7% annually over the last four years, is expected
to continue. The climate index was upgraded and reached the
highest level in January. Capital expenditures and private
consumption are also expected to grow along with growth in
imports and exports.
While China’s economic situation remains good, the
experts expect exports to decline somewhat. Meanwhile
Japan’s economy has cooled resulting in a downgrade in the
current economic situation, but the outlook is still positive.
The current economic view for Hong Kong and Vietnam are very
positive with strong predictions for growth in exports and
imports for the Vietnamese market.