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ifo Economic Climate Indicator for the Euro Area Hits Highest Level since 2000

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Advance results of the ifo World Economic Survey (WES) of 1st quarter 2018 Press Release (PDF, 184 KB) The ifo Economic Climate Indicator for the Euro Area hit its highest level since summer 2000 this quarter, rising sharply to 43.2 points from 37.0 balance points. According to experts, the current economic situation in particular continued to improve. Economic expectations also brightened slightly. The dynamic upswing is expected to continue. The improvement in the economic climate was primarily due to more positive assessments by experts in France and Italy. The indicator also rose somewhat in Germany. In The Netherlands, by contrast, the climate deteriorated. In the euro area’s large member

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Advance results of the ifo World Economic Survey (WES) of 1st quarter 2018

The ifo Economic Climate Indicator for the Euro Area hit its highest level since summer 2000 this quarter, rising sharply to 43.2 points from 37.0 balance points. According to experts, the current economic situation in particular continued to improve. Economic expectations also brightened slightly. The dynamic upswing is expected to continue.

The improvement in the economic climate was primarily due to more positive assessments by experts in France and Italy. The indicator also rose somewhat in Germany. In The Netherlands, by contrast, the climate deteriorated. In the euro area’s large member states the economic situation improved. Spain was the only exception to this rule, although economic expectations did brighten there too.

There are several drivers behind the upswing. A growing number of the experts surveyed reported an uptick in investment activity and private consumption, which they expect to generate marked growth in the months ahead. Experts also expect foreign trade to pick up. They expect an inflation rate of 1.7 percent in 2018, following the 1.5 percent increase in consumer prices in 2017. At the same time, fewer survey participants expect long term interest rates to rise. Experts assessed access to bank loans as largely 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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