EXPERT opinion about prospects of global economic recovery is again dimming, according to a World Economic Survey (WES) conducted by and Munich-based Ifo Institute for Economic Research in partnership with Paris-based International Chamber of Commerce (ICC).

As put by IFO, “After two successive increases the Ifo World Economic Climate Indicator fell in the third quarter. The decline was due to both unfavourable assessments of the current economic situation and a less positive six-month economic outlook. The results imply a setback in the recovery of world economy.”

WES, which received responses from 1,079 experts in 123 countries, showed that the world economic climate indicator fell to 85.1 in Q3 2012 after two successive increases. These results are significantly below the long-term average of 96.7 (1996-2011) for the Survey, says an ICC release dated 16 August.

These findings imply a setback in the recovery of the world economy due to unfavourable assessments of the current economic climate and a less positive six-month outlook than in previous quarters, particularly in Europe, it adds.

While the experts downgraded their evaluation of the economic climate from previous quarters –standing at 82.4 and 95.0 in Q1 and Q2 of this year respectively – they implied that the global economy is still in recovery and has not fallen back into recession.

There is cause for some optimism, however, according to the Survey findings, which revealed that economic sentiment is improving in China, where experts anticipate further stimulus from the Chinese central bank and inflation seems to be under control.

IFO says: WES experts on average expect short-term interest rates to fall over the next six months. However, they believe that long-term interest rates are set to increase slightly.

According to WES experts, the British pound and the yen are over-valued. On worldwide average economic experts expect the dollar exchange rate to rise over the next six months.