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DüsseldorfExperts' confidence in euro area economic policy continues to dwindle and, according to preliminary results from the Fourth Quarter World Economic Survey (WES) survey of the Ifo Institute, sentiment it's still significantly deteriorated.
The corresponding barometer of the Munich Institute rose from 19.6 to 6.6 points, as announced Monday the Institute in a press release. This is the lowest level since mid-2016. The experts strongly revised their badessment of the situation and their expectations. The economy has hard times ahead.
Since 1989, the Ifo Institute interviews quarterly experts of the changing economic situation and other economic data. The results for the euro area are based in October 2018 on the reports of 370 experts. As a result, the president of the Ifo, Clemens Fuest, expects to "troubled waters" for the economy of the euro area.
Especially in Italy and Spain, expert ratings are significantly lower. In Spain, expectations were significantly more pessimistic compared to the previous quarter. After all, in badessing the current situation, there has been only a relatively small downward correction.
In Italy, where the debt budget is booming, experts have estimated that the situation and expectations were significantly more negative than in the previous quarter. In Germany and France, expectations remain almost unchanged, but the current situation is considered slightly worse. In the Netherlands, on the other hand, the badessment of the situation has improved.
In Germany too, the mood has already darkened. Economic output in Germany also declined in the summer, according to calculations of the IfW Institute last Friday. According to the institute, this is due to decreases in production in the automotive industry. The economic performance in Germany is expected to have declined by about 0.3% in the third quarter, he said.
The index of Purchasing Managers at the IHS Markit Institute, which had fallen 1.5 points to 52.2 points in October, was similar. Although the barometer is still above the 50-meter threshold, it has also fallen to its lowest level in nearly two and a half years.
For the first time since the end of 2014, companies saw a drop in new orders. "Some of the executives interviewed attributed this new slowdown to ongoing conflicts in the auto industry and the reluctance of its customers abroad," IHS Markit told the survey of 400 companies. For the first time in four years, companies appeared skeptical in the next twelve months.
Deutsche Bank has recently lowered its expectations downward. For the year 2018, the bank expects a slight decline in profit compared with the previous year. However, the bank invoked the internal greens as reason: the effects of its austerity measures in the investment bank.
Ifo experts have also lowered the eurozone's export outlook. Because the conflict between the world's two largest economies, the United States and China, is weighing on the global economy. At the same time, experts expect short- and long-term interest rates to rise over the next six months and the US dollar will continue to appreciate. The forecast of the inflation rate for this year increases slightly from 1.7% to 1.8%.
With agency equipment.
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