ifo World Economic Climate

Results of the ifo World Economic Survey (WES) for the 4th Quarter 2018

ifo World Economic Climate Deteriorates Further

Munich, 12 November 2018 – The ifo World Economic Climate deteriorated for the third time in succession.
The indicator dropped from +2.9 points to -2.2 points this quarter. Assessments of the current economic
situation deteriorated significantly, but nevertheless remain above their long-term average. Economic
expectations were also scaled back considerably. Growth is waning in the world economy.
The economic climate deteriorated particularly strongly in emerging and developing countries. With the
exception of Latin America, economic expectations declined far more sharply than assessments of the current
economic situation. The economic climate in Latin America, by contrast, improved due to more optimistic
economic expectations. In the advanced economies the economic climate remained largely unchanged. Here,
however, a clear division emerged: while assessments of the current economic situation and expectations
improved in the USA, they cooled down in the European Union.
According to experts, the deterioration in worldwide economic expectations was particularly clearly reflected in
weaker private consumption, while investment activity did not decline any further. Survey participants also
expect far weaker growth in world trade, which is probably due to the fact that they do not expect existing trade
barriers to be dismantled. Overall, they are expecting world gross domestic product to increase by 3.6 percent
on average in the years ahead.
Clemens Fuest
President of the ifo Institute

ifo World Economic Climate

Balances Economic climate

100
Assessment of economic situation
80
Economic expectations
60
40
20
0
-20
-40
-60
-80
-100
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: ifo World Economic Survey (WES) IV/2018. © ifo Institute

ifo World Economic Climate (Balances)

Quarter/Year IV/2016 I/2017 II/2017 III/2017 IV/2017 I/2018 II/2018 III/2018 IV/2018
Climate -0.7 3.0 13.5 13.2 17.1 26.0 16.5 2.9 -2.2
Situation -14.9 -8.7 5.1 12.5 17.2 28.3 27.4 17.5 12.2
Expectations 14.6 15.5 22.2 14.0 16.9 23.9 6.1 -10.6 -15.7
Source: ifo World Economic Survey (WES) IV/2018. © ifo Institute

For long time-series in Excel format consult www.cesifo-group.de/langereihen.

Since 1989 the ifo Institute has conducted a quarterly survey in numerous countries on business cycle developments and other
economic factors in the experts’ home countries. The October 2018 survey received responses from 1,230 experts in 119 countries. A
detailed regional analysis appears in the quarterly journal: ifo World Economic Survey. This press release contains advance
information on the most important results.

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ifo Economic Climate for World Regions
Balances

Economic climate Assessment of economic situation Economic expectations

Advanced Economies Emerging Market and Developing Economies

100 100

50 50

0 0

-50 -50

-100 -100
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

European Union United States

100 100

50 50

0 0

-50 -50

-100 -100
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Emerging and Developing Asia Latin America

100 100

50 50

0 0

-50 -50

-100 -100
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Commonwealth of Independent States Middle East and North Africa

100 100

50 50

0 0

-50 -50

-100 -100
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Source: ifo World Economic Survey (WES) IV/2018. © ifo Institute

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ifo Business Cycle Clock World Economy
Balances

Economic expectations Development of the last five quarters

100
Upswing Boom

80

60 I/2010

I/2014
40
I/2013 I/2011

20
I/2015 I/2007

0
I/2016 I/2012
IV/2018
-20
I/2008

-40
I/2009

-60

-80

Recession Downswing
-100
-100 -80 -60 -40 -20 0 20 40 60 80 100
Assessment of economic situation
Source: ifo World Economic Survey (WES) IV/2018. © ifo Institute

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