Global economic confidence level plummets
Geneva, August 22, 2012
Confidence in the state of the world economy over the next 12 months fell to the lowest level in five quarters, according to the Global Confidence Index prepared by the World Economic Forum.
The relative optimism of the previous quarter evaporated against a backdrop of slowing growth in the US and China as well as a lingering eurozone crisis, with 72 per cent of respondents to the poll reporting that they were not confident about the state of the global economy over the next 12 months, up from 37 per cent.
“Despite every effort to ensure economic, social and political stability, we are still just one shock away from everything getting off track again – which points to the need for greater resilience globally,” said Lee Howell, managing director at the World Economic Forum, who is responsible for the Forum’s Global Risks 2012 report.
All three of the main confidence indices measured in the poll of 430 experts reflected a markedly more negative outlook in the third quarter of the year. As well as the gloomy overview, 68 per cent of experts now gauge a significant economic disruption to be likely or very likely in the next 12 months, up from 46 per cent in the second quarter.
The perceived likelihood of a big societal disruption also increased, with 53 per cent of respondents seeing this as likely or very likely over the next year, up from 46 per cent three months previously. Meanwhile, concerns about a major geopolitical disruption remained stable at 55 per cent.
Respondents were increasingly worried about the ability of existing institutions to cope with the multifaceted crisis. Some 61 per cent of the experts surveyed were not confident in global governance, up from 45 per cent in the previous quarter, while those who lacked confidence in global cooperation rose to 48 per cent from 37 per cent.
The Global Confidence Index – a joint initiative of the World Economic Forum’s Risk Response Network and Global Agenda Councils – is the only research initiative of its kind targeting such a large group of international experts who focus on monitoring key trends, identifying global risks and mapping their interlinkages.
The first quarterly report was issued in September 2011, and today’s results are the fifth successive instalment. The next Global Confidence Index results will be available on November 12, 2012, the statement said. - TradeArabia News Service