Summary
The current and six-month global economic expectations deteriorated in May. Gauges assessing the economic outlooks fell to 0.47 and 0.48, Dukascopy Bank SA poll showed. The three-year economic outlook improved to 0.65 from 0.64 in April.
Respondents became significantly less optimistic about Europe’s economic prospects in May. The current, six-month and three-year economic sentiment indexes retreated 0.05, 0.12 and 0.01 points to 0.19, 0.22 and 0.47 respectively.
North American current and three-year economic sentiment indexes rose to 0.56 and 0.73 respectively. The six-month economic outlook darkened by 0.04 to 0.55, a sign the U.S. economy is still facing headwinds.
Asia-Pacific economic expectations worsened, while the region still retained its appealing outlook with indexes values of 0.66, 0.66 and 0.74 for the current, six-month, and three-year economic outlooks respectively.
Economic outlook (term structure)
Figure 3 presents the term structure of the Dukascopy Bank Sentiment Index (left-hand scale) mapped against GDP growth forecasts made by poll respondents (right-hand scale). Overall, DBSI values and GDP growth forecasts match directionally, supporting the view that the economic conditions in all three regions will improve gradually in 2015.
Respondents expect mild recession in the European Union over the course of a year with a negative GDP growth of around 0.5 per cent. Experts claim that the economy is going to perform better with a GDP growth of 0.63 per cent three years from now.
Experts forecast North-American GDP growth rate to accelerate at the end of this year to 1.47 per cent and further to 2.13 in 2015. The International Monetary Fund, in turn, forecasts growth rate of 2.1 per cent in 2012.
Asia-Pacific GDP growth forecast is 3.73 per cent for 2012 and 4.2 per cent for 2015, supporting the view the regional economy is performing considerably better, compared to its European and North American counterparts.
Current economic outlook
Figure 4 shows the current economic outlook for Europe, North America, and Asia-Pacific. Global outlook worsened 0.02 to 0.47 in May, after declining 0.01 in April, as experts became less optimistic about current global economic prospects.
Europe’s current economic outlook deteriorated 0.05 points to 0.19 points. 28 experts (93%) claim the economic outlook is either “definitely negative” or “fairly negative”, a sign Europe’s economy is facing significant challenges. Only two respondents (7%) believe the economic outlook is “neutral”.
Current North American economic prospects ameliorated to 0.56 in May, the highest reading since November, from 0.54 the previous month with majority of respondents claiming the economy is in recovery mode. Only two respondents (7%) are pessimistic over the current economic outlook.
Economic sentiment for Asia-Pacific declined for a second consecutive month to 0.66. Still, an absolute majority of experts (29 / 97%) are optimistic about the current economic performance, while only one claims the outlook is “fairly negative”.
Six-month economic outlook
Figure 6 shows the six-month global economic outlook for the three listed regions. The results of the poll reveal that the sixmonth economic outlook differs insignificantly from the current economic performance.
Europe’s six-month economic forecast tumbled by 0.12 points in May from 0.34 points in April and is only 0.03 points higher, compared to the current economic prospects. The majority of respondents (27) believe that the six-month economic outlook is either “definitely” or “fairly negative”.
North American economic prospects also deteriorated, shows Dukascopy Bank poll. The index of sentiment fell 0.04 points to 0.55, while standard deviation slid 0.01 point.
Asia-Pacific six-month economic sentiment index erased 0.03 points to 0.66, 0.18 points above the global economic outlook. Half of the respondents (15) claim that the six-month regional economic outlook is positive, while thirteen experts believe that the outlook is neutral.
Three-year economic outlook
Three-year global economic prospects remain considerably better, compared to short-term economic outlook.
Europe’s economic outlook for 2015 deteriorated 0.01 points to 0.47, 0.18 points below the global economic forecast. Seven respondents (23%) claim the economic prospects are “fairly” or “definitely” positive, fourteen believe the outlook is neutral and the rest are rather pessimistic about the economic performance three years from now.
The North American economic forecast for 2015 improved 0.04 points to 0.73 points in May from April, the only gain among the three observed regions, and standard deviation fell 0.06 points to 0.22, a sign experts are more united in positive assessment of the regional economy.
Poll respondents are the most optimistic about Asia-Pacific economic performance three years from now with a sentiment index value of 0.74 points. Specifically, ten experts claim the three-year economic outlook is “definitely” positive and another ten say the outlook is “fairly positive”.
Economic outlook comparison
Figure 10 shows a discrepancy in views on economic outlook among local and foreign experts. May’s poll results reveal that experts from Europe and North America are more pessimistic about the three-year economic performance of their regions, compared to their colleagues from overseas.
Europe: Local experts are slightly more optimistic about the current economic performance than their colleagues from North America and Asia-Pacific. The discrepancy in views widens to negative 6 points for the six-month and three-year economic outlooks.
North America: Americans are more confident on the current economic outlook than their colleagues from overseas. The discrepancy in opinions sheds to zero for the six-month economic outlook and widens to a negative 0.09 points for the three-year economic outlook.
Asia-Pacific: Respondents from Asia-Pacific are slightly less optimistic (0.65) about the current economic outlook compared to foreign experts (0.66). Discrepancy in views widens to 0.06 points for the six-month economic outlook and 0.16 points for the three-year outlook.
