Ifo Economic Forecast 2012/2013: Euro Crisis Delays Upturn

On 13 December 2012 the Ifo Institute presented its economic forecast for 2012 and 2013 in the framework of ist pre-Christmas press conference. The world economy has been steadily cooling down since the middle of last year. This has been apparent in all key economic regions, albeit to differing degrees; and world trade has continued to slow down over the past 18 months as a result. The slackening of global economic momentum since mid-2011 is primarily due to the huge adjustment processes that are currently taking place in the euro area. Both public and private players have started to consolidate their finances, which is having a major negative impact on demand for consumer and capital goods. Moreover, concerns about the solvency of the State and banking systems in the crisis-afflicted countries of the euro area, as well as the risk of disorderly exits from the European Monetary Union, are unsettling investors, consumers and producers worldwide.