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Economic confidence improves in Q1: Poll

Posted on Jan 21, 03:02PM | IBNS

Confidence in the state of the world economy recovered somewhat in the first quarter of 2013, according to a World Economic Forum poll of 390 experts.

The Economic Confidence Index rose to 0.43 from 0.38 on a scale from 0 to 1, getting closer to optimistic territory 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 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," said Martina Gmur, Senior Director of the Forum's Network of Global Agenda Councils.

The number of respondents with a pessimistic ("not confident" or "not at all confident") outlook for the economy in 2013 fell to 43pc from 56pc last quarter, while the percentage of optimists ("confident" or "very confident") increased to 23pc from 17pc .

The remaining 34pc were neutral. This is 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 (48pc ) 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 46pc , 50pc , 35pc and 19pc respectively.

Expectations of the world's ability to deal with such threats remained stable, if weak: 51pc of respondents lacked confidence in global governance, and 45pc 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.