World Economy: Heading South West (That’s Not Good)

By   Shlomo Maital    

I know I am repeating myself.  I wrote about this just recently.  But, the latest Ifo (Munich think tank) survey reveals this:        

  “In the first quarter of 2019, the economic climate indicator for the advanced economies has tumbled to its lowest value since the fourth quarter of 2012” 

                                  
  The graph above shows on the x axis, “assessment of the current economic situation”  and on the y axis,  “economic expectations” (how you think the economy will trend in the coming 6 months). 
    The worst outcome is:  the ‘dot’ moves south west (i.e. the economy is declining, and it will continue to decline in the near future).
     Ifo Munich gathers data on the world economy, by region, by a survey of experts. 
     Look closely at the graph –the “world economy” moves strongly south west.  So do the Euro area and advanced economies.  Same for Mideast and North Africa.  Nowhere does any economy move other than west (down). 
      Why?   How about – US -China trade war, global uncertainty, Brexit,  EU disunity, and….   The list is long. 
       We can blame part of this on Trump.   He has thrown a monkey wrench into the world trading system, introduced massive uncertainty….and the world economy has cooled.    When the two largest economies in the world, US and China,  AND Europe, all cool at once….   We are in trouble.
       Fasten your seat belts.  It will get worse before it gets better.