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Weakening of global economy in third quarter

The surveys index dropped to 94.1 from 96.8 in the second quarter.

The ICC urged G20 leaders to take pro-growth steps at the upcoming G20 Summit in St. Petersburg, such as agreeing to push through a final agreement in trade facilitation at the World Trade Organization by the end of the year. The economists indicated that the global recovery has stalled and that if business conditions in Asia worsen, world economic growth will slow more.

In Asia, the IFO economic index fell below its long-term average after a temporary boost in optimism last quarter, the ICC said. Most of the concern centres on China, where growth is in the seven per cent range after years of double-digit and near-double-digit growth.

The ICC poll suggests that the European Unions economy is beginning to stabilize with help from the European Central Bank. Economic expectations have reached a three year high, boosting the areas economic confidence index to its highest level since late 2011. However, the overall economic climate is still below the long-term average.

The survey indicated an expectation for inflation to increase at a 3.2 per cent rate, unchanged from the previous quarter. Survey participants expect the value of the US dollar to grow moderately during the next six months and to appreciate against the euro. The US economy grew 1.7 per cent in the second quarter, according to preliminary government estimates. Last month, the International Monetary Fund estimated the global economy would increase by 3.1 per cent this year, down 0.2 per cent from its April forecast.

(Courtesy: Asian Shipping News)