By Andy Sambidge
World Economic Forum survey of experts shows significant increase in optimism
Confidence in the world economy has increased significantly over the past three months, according to experts polled by the World Economic Forum.
The Economic Confidence Index rose to 0.48 from 0.43 on a scale of 0 to 1 during the first three months of the year, WEF said in a statement.
The improvement comes amid an easing of the Eurozone crisis and belief that the world economy may had avoided a double-dip recession, it said.
Thirty-one per cent of respondents said they are either “confident” or “very confident” about the prospects for the global economy, compared to 23 percent in the first quarter.
The remaining respondents were almost equally split at about 34.5 percent on whether they are “neutral” or “not confident or not at all confident” compared with 34 percent and 43 percent the previous quarter, respectively.
The indices tracking confidence in global governance and global cooperation made similar significant improvements over the past quarter.
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. However, the index did not break into positive territory above 0.5.
“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.
“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.”
The indices measuring major social, geopolitical, environmental or technological disturbances 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.
Some 51 percent of business leaders felt that such a disruption is “likely or very likely” and only 13 percent thought it is “unlikely or not at all likely” compared with 42 percent and 33 percent for public sector respondents, respectively.
The global confidence index – a joint initiative of the World Economic Forum’s Risk Response Network and Global Agenda Councils – targets a large group of international experts who focus on monitoring key trends, identifying global risks and mapping their interlinkages.