Economic Experts Survey: Political Climate Deteriorating Worldwide (Q1 2022)
The global economic situation remained tense in Q1 2022. The coronavirus pandemic regained momentum in many countries through the Omicron variant and led to significant restrictions on economic activity. The geopolitical break caused by the Russian invasion of Ukraine on February 24, 2022, is also affecting the global political and economic climate. The Economic Experts Survey (EES), a quarterly survey conducted by the ifo Institute and the Swiss Economic Policy Institute, captures the assessments of international economics experts on the current economic policy and the political climate. 1,603 economic experts from 132 countries participated in the survey, which ran from February 16, 2022, to March 2, 2022.
Large Regional Differences in the Assessment of Economic Policy
The economic experts’ assessments of the current economic policy in their country vary widely at global level. In Northern, Western, and Southern Europe, the experts observe a slight improvement compared with the previous quarter. In Eastern Europe, however, they assess the current economic policy situation more negatively than at the end of 2021. While the economic policy in Central and Southern America is assessed more negatively than in Q4 2021, the experts in Northern America notice a slight improvement. Apart from Eastern Africa, the experts assess the economic policy situation in the African regions as slightly to noticeably more negative than at the end of 2021. The results for Asia and Oceania are similarly divided: Experts in Central Asia, Eastern Asia, and South-Eastern Asia observe positive economic policy developments; participants in Southern Asia and Oceania have a more negative perception.
Economic Policy Must Improve to Tackle Future Challenges
The assessment of the overall economic policy is derived from the experts’ assessments of the current economic policy and the assessment of the economic policy regarding future challenges. Overall, the economic policy is rated better when not considering future challenges. The differences are particularly pronounced in the Americas, Asia (exception: Southern Asia), Europe, and Oceania. Findings for Africa are more heterogeneous: while Northern Africa follows the general trend and differences are in Central and Western Africa, the experts in Southern Africa and Eastern Africa assess the economic policy regarding future challenges more positively than current policy. In general, however, experts still assess the economic policy in large parts of Asia and Europe as more forward-looking than in the previous quarter.
Central and Southern America See Deterioration of Political Climate
According to the economic experts, the global political climate deteriorated compared to the previous quarter. Especially in Central and Southern America, but also in Northern America, the political situation worsened. In Europe, there is a clear east-west difference: while the political situation in Northern, Western, and Southern Europe improved, the political climate in Eastern Europe deteriorated. Similarly to the experts’ assessment of the economic policy, the experts assess the political situation in the African regions slightly to noticeably more negatively than in the previous quarter (exception: East Africa). In Asia, Western and Central Asia show a slight improvement, and Eastern and South-Eastern Asia even a significant improvement. Southern Asia is the only region in Asia where the political climate deteriorated. In Oceania, the experts noticed a slightly negative political trend.
Government Performance and Political Stability Rising in Large Parts of Asia
The assessment of the political climate is derived from the experts’ assessments of government performance and political stability. While political stability increased on average in the experts’ perception, government performance deteriorated. Governments in Africa (exception: Eastern Africa) and the Americas (exception: Northern America) were primarily responsible for the deterioration in political performance. The experts noted improvements in political performance among governments in Asia (exception: South Asia). Findings for Europe are more heterogeneous: while governments improved especially in Northern Europe, performance in Eastern Europe deteriorated significantly. In Oceania government performance deteriorated somewhat compared to the previous quarter.
Political stability improved in large parts of Asia (exception: Southern Asia) and in Oceania. By contrast, political instability became more pronounced in the Americas. Experts notice strong regional differences in Africa: while political stability deteriorated in Central Africa and Southern Africa, the experts observe an improvement of the situation in Northern, Eastern, and Western Africa . There are also pronounced regional differences in Europe: Northern, Western, and Southern Europe are showing increased political stabilization, while Eastern Europe is experiencing political destabilization. In general, it is worth noting that both government performance and political stability in Eastern Europe were rated worse compared to the previous quarter.