FRANKFURT (MNI) – The economic climate in the Eurozone improved for
the seventh consecutive quarter in 4Q, lifting the Ifo institute’s
climate indicator to its highest level in three years, the institute
reported on Wednesday.
The “marginal” one-point gain to 107.5, however, still left the
indicator below the long-term average of 110 points, Ifo noted.
Disaggregating the main figure, respondents assessed the current
situation much more favourably in 4Q, boosting the sub-indicator 22.4
points to 131.5.
Conversely, the outlook for the coming six months fell for the
third time in a row, down 11.5 points to 93.4, its lowest point since 2Q
2009.
Nevertheless, medium-term economic prospects are still better than
a year ago, Ifo said. Experts in Ifo’s latest World Economic Survey
expect an annual growth rate of +1.8% over the next three to five years,
up from +1.4%.
Inflation expectations are unchanged at +1.6% for this year, below
the European Central Bank’s target. Only a few of those polled foresee
any increase in either short-term or long-term interest rates in the
next half year.
Turning to exchange rates, respondents felt that the U.S. dollar
was “clearly undervalued” compared to the euro and anticipate further
depreciation of the greenback.
[TOPICS: M$X$$$,M$XDS$,MI$$$$]
