Survey: Euro zone economic climate worsened in 1Q

[February 11, 2009]  FRANKFURT (AP) -- An Ifo institute survey released Wednesday showed confidence in the economies of the 16 countries using the euro currency worsened for the sixth consecutive quarter and is now the lowest since the survey began in 1993.

The Munich-based institute's survey of international and national organizations showed the economic climate in the first quarter of 2009 fell to 45.8 points, from 50.8 points in the last quarter of 2008. The economic climate average is 90.4 points.

Economic expectations for the next six months rose, however, to 49.6 points from 41.9 points, as observers hoped for an eventual turnaround in the euro zone and world economies.

"The economic climate indicator deteriorated in the first quarter of 2009 in all countries of the euro area and has now reached a historic low," Ifo president Hans-Werner Sinn said in a statement.

"In the coming six months, the weakening of the economy will continue in the euro area, albeit at a slower pace," Sinn said.

The institute's current situation indicator fell to 41.1 points in the first quarter, compared to 61.7 points in the last quarter of 2008.

Germany and the Netherlands saw the greatest drop in the assessment of the current situation, but the lowest assessments overall were reported in France, Ireland, Portugal, Spain and Italy.

Finland and Austria, and also young euro member states Slovakia and Slovenia, all reported assessments of their own economic situation above the euro zone average.

Average euro zone inflation expectations for 2009 are at 1.6 percent, which is below the European Central Bank's target of around or below 2 percent, Ifo said.

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On the Net:

http://www.cesifo-group.de/

[Associated Press; By GEORGE FREY]

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