The economic confidence index‚ which is compiled by the World Economic Forum (WEF) and polls 390 experts on their confidence in the state of the world economy‚ recovered to 0.43 in the first quarter of this year from 0.38 in the final quarter of last year‚ the WEF reported on Monday.
The WEF said the index improved amid some positive signs from the eurozone and a sense that the worst fears for the US “fiscal cliff” debt crisis had been allayed.
Regionally‚ the improvement in confidence was most marked in North America.
The index is measured on a scale from 0 to 1. The confidence indices are calculated by taking the average of the following values that have been assigned to the responses: Not at all confident is represented by a 0‚ and not confident is represented by a reading of 0.25. A reading of 0.5 shows neutral‚ while confident is represented by a level of 0.75. An index level of 1 shows strong confidence.
“The first economic confidence index result of 2013 gives us some cause for optimism‚ but the figure is still in negative territory overall. We still need dynamic leadership to drive the economy ahead and overcome challenges‚” the Forum’s Network of Global Agenda Councils senior director Martina Gmür said.
The number of respondents with a pessimistic outlook for the economy in 2013 fell to 43% from 56% last quarter‚ while the percentage of optimists increased to 23% from 17%. The remaining 34% were neutral.
This was the second highest level of economic confidence shown since the index began seven quarters ago.
Echoing this more positive sentiment‚ fears of a major economic disruption fell to the lowest level since the start of the index.
Just under half of the respondents (48%) believed that a financial shock was probable over the next 12 months‚ five percentage points lower than a quarter ago and 20 points down from half a year ago.
The other measures of confidence covered in the poll were stable.
The percentage of respondents who expected major social‚ geopolitical‚ environmental or technological disturbances hovered at 46%‚ 50%‚ 35% and 19% respectively.
Expectations of the world’s ability to deal with such threats remained stable‚ with 51% of respondents lacking confidence in global governance‚ and 45% in global cooperation.
The index is released ahead of the World Economic Forum annual meeting 2013 in Davos-Klosters‚ which is convening under the theme “Resilient Dynamism” from 23 to 27 January. This year‚ over 2‚500 participants will gather‚ including nearly 50 heads of state or government and more than 1‚500 business leaders.
The global confidence index is a joint initiative of the WEF’s Risk Response Network and Global Agenda Councils. The first quarterly report was issued in September 2011‚ and today’s results are the seventh successive instalment. - I-Net Bridge