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World Economic Survey | FEATURE

strong growth in the year of the tiger

FOR POLITICIANS at home and abroad, the nebulous world economy can be a convenient scapegoat for all manner of domestic economic woes: few people understand it, and even fewer control it. Not only are international conditions a crucial influence on economic recovery, the rise of Asian economies – with China at the forefront – is one of the biggest changes being tracked by this generation of economists and correspondents. It is, after all, the year of the Tiger.

Helping to bring the situation into a sharper focus is the World Economic Survey (WES), a research collaboration between the International Chamber of Commerce and the IFO Institute for Economic Research in Germany. The quarterly survey contains the World Economic Climate Indicator, an index compiled by polling 1,057 experts in 94 countries, and offering a

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New research from the ICC and IFO Institute for Economic Research suggests that the world economy is returning to health. According to the report’s co-author, Asian economies are impressing most, writes RURAIDH

CONLON O’REILLY.

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simple barometer of the global economic state of play. The latest news is good: the quarterly index has risen to 99.5 per cent from October’s figure of 91.4; the fourth consecutive increase. What’s more, the current result exceeds the long-term figure of 96.9 per cent, the average score between 1991 and 2009. What all this means is that economists across the world are seeing more and more reasons to be optimistic -- in their view, economic recovery is becoming a reality. “The latest results certainly tell us that the

recovery in the world economy is moving forward,” says the report’s co-author, Dr Gernot Nerb, a Director of IFO and Head of Industry Branch Research. The German economist has been with IFO since 1967, apart from a consultancy role at the European Commission

and one at an investment bank. His career is based on economic analysis and forecasting. “According to our ‘recovery watch’, which combines the current situation with the future expectation, there are clear signals that we are in the recovery phase.” “From our experience, this indicator is highly reliable and particularly correlates with world trade, so the improvement and outlook is signalling that trade, which had been negative for the first time in a long time in the previous year – is recovering. This would be in line with the IMF forecast for this year: GDP growth of about 3.5 per cent, maybe a bit higher, and world trade could certainly grow by around 5 per cent.” Problems still exist though. Unemployment and accompanying low consumer demand are factors, especially in the Euro zone, North

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