21 November 2008

Economic confidence in U.S. lowest since 1983

The following was reported on in the 21 November 2008 edition of "American Shipper".

The world economic climate index has dropped for the fifth consecutive quarter in a row, hitting its lowest level since 1998.

The index, compiled by the International Chamber of Commerce and the Ifo Institute for Economic Research, fell steeply in the fourth quarter, dropping 13.4 points to 60.0 from 73.4 the previous quarter. The index is based on a poll of 1,001 economic experts in 91 countries in October, before U.S. elections were concluded.

The decline is largely due to economists’ unfavorable assessments of the current economic situation, but also their expectations for the next six months.

In the United States, the economic outlook fell to the lowest level since the ICC/Ifo index was created in 1983. Lack of confidence in the U.S. government’s economic policy was cited as the most important problem. The index also dropped sharply in the euro area and Russia, and fell to the lowest level since 2001 in Asia.

Economists surveyed expect a global inflation of 5.4 percent for 2008, slightly higher than the rate predicted in the previous quarter of 5.2 percent.

The experts polled said the U.S. dollar is no longer undervalued but has reached a fair level, and they anticipate a moderate strengthening in the value of the dollar almost worldwide in the next six months.