Joint Economic Forecast Spring 2011: Upswing continues - European Debt Crisis still Unresolved

On 7 April 2011 the economic institutes in the Joint Economic Forecast Project Group presented their spring 2011 forecast to the press in Berlin. In their estimation, the world economy is buoyant in spring 2011. Especially in the emerging economies the economic momentum, after a phase of noticeably slower expansion in the summer half year of 2010, is strong once again. But also in the advanced economies, output and trade have picked up noticeably. However, the pace of the expansion in the US economy is still moderate in comparison with previous upswings, and in the euro area the picture is anything but uniform: with an upswing in Germany and some of its neighbouring countries and stagnation in the Mediterranean area. At the present, world attention is still fixed on the natural and nuclear disasters in Japan. Normally, the macroeconomic effects of natural catastrophes are not very serious in industrialised countries. In this case, however, the institutes anticipate perceptibly higher production losses than after the Kobe earthquake in 1995. It will take some months before sufficient electricity capacities are restored and production bottlenecks are eliminated. However, effects on the economic activity in other parts of the world will be perceptible only in the short term. The political unrest in Arab world is also having a disturbing effect. The unrest is of importance for world economic activity in that it represents a risk for the supply of the world economy with mineral oil. The recent rise in the oil price, however, is largely a reaction to the healthy state of the world economy.