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ifo Economic Climate in the Euro Area Improves

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Advance results of the Ifo World Economic Survey (WES) of 3rd quarter 2017 Press Release (PDF, 293 KB) The ifo Economic Climate in the Euro Area improved again considerably in the third quarter. The indicator rose from 26.4 to 35.2 balance points, reaching its highest level since autumn 2000. Assessments of the current economic situation were particularly more favourable than last quarter, but the six-month outlook also brightened. Strong growth is expected to continue in the second half of 2017. In Germany, France, Italy and Spain, the euro area’s major economies, both the current economic situation and expectations improved. Expectations rose most sharply in France, but differences persist in terms

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Advance results of the Ifo World Economic Survey (WES) of 3rd quarter 2017

The ifo Economic Climate in the Euro Area improved again considerably in the third quarter. The indicator rose from 26.4 to 35.2 balance points, reaching its highest level since autumn 2000. Assessments of the current economic situation were particularly more favourable than last quarter, but the six-month outlook also brightened. Strong growth is expected to continue in the second half of 2017.

In Germany, France, Italy and Spain, the euro area’s major economies, both the current economic situation and expectations improved. Expectations rose most sharply in France, but differences persist in terms of assessments of the current economic situation. Survey participants almost unanimously assessed the current economic situation in Germany as good. Fairly positive assessments also prevailed in Spain. In France and Italy experts described the current economic situation as not yet satisfactory.

Experts scaled back their inflation expectations for 2017 somewhat to 1.5 percent. Survey participants expect interest rates to rise over the next six months both in the short term and particularly in the long-term. After the euro’s appreciation against the US dollar last quarter, experts expect little fluctuation in the exchange rate over the next six months. Banks were far more willing to grant companies credit this quarter (especially in France) and survey participants now describe lending as less restrictive.

Clemens Fuest
Clemens Fuest took over from Hans Werner Sinn as chairman of the IFO Institute in April 2016. He is professor at the Faculty of Economics of the University of Munich.

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