Worsening world economy ‘appears to be over’ – WEF

BusinessesConfidence in the world economy has increased significantly over the past three months of 2013, results of a World Economic Forum (WEF) poll released April 15, 2013 has shown.

Experts believe that worsening of the world economy appears to be over.

“It looks as though the worst is over and experts are not too worried about a double-dip recession of the world economy, as a whole,” said Martina Gmür, Senior Director of the Forum’s Global Agenda Council, of the poll of 304 global experts.

According to the WEF, the Economic Confidence Index (ECI) rose to 0.48 from 0.43 on a scale of 0 to 1 during the first three months of the year, amid an easing of the Eurozone crisis and belief that the world economy may have avoided a double-dip recession.

“The score puts the index back in neutral territory for the first time since it fell into low-confidence territory in the third quarter of 2012; it marks a return to its most recent peak during the second quarter of 2012, the WEF stated.

However, the index did not break into positive territory above 0.5, the Davos-based Forum observed.

“But, while the economic index has seen an improvement over three consecutive quarters and is now back at its peak from one year ago, it is worth remembering that, back then, the Eurozone crisis was already in full swing; and the index has so far not crossed over into positive territory,” Martina Gmür added.

The poll reported that 31% of respondents said they are either “confident” or “very confident” about the prospects for the global economy, compared to 23% in the first quarter.

The remaining respondents, according to the WEF, were almost equally split at about 34.5% on whether they are “neutral” or “not confident or not at all confident” compared with 34% and 43% the previous quarter, respectively.

The indices tracking confidence in global governance and global cooperation reported significant improvements over the past quarter.

The indices measuring major social, geopolitical, environmental or technological disturbances also remained stable over the previous quarter.

With regard to geopolitical disruptions, respondents working in the business sector were more worried about the likelihood of a major disruption over the next 12 months than respondents from the public sector, the poll results indicated.

It said some 51% of business leaders felt that such a disruption is “likely or very likely” and only 13% thought it is “unlikely or not at all likely” compared with 42% and 33% for public sector respondents, respectively.

By Ekow Quandzie

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