Global confidence dips on European concerns
Published 11/02/2010 | 05:00
CONFIDENCE in the world economy dropped in February on concern worsening government finances in some European nations will derail the global recovery, according to a Bloomberg survey.
The Bloomberg Professional Global Confidence Index dropped to 54.9 from 66.6 in January, when the reading was at the highest level since the series began two years ago.
The index exceeded 50 for a seventh month, which meant there were more optimists than pessimists.
The survey was conducted last week, before Germany and other EU nations signalled they may help support Greece's government finances.
"The situation in Greece and other European economies shows us that the global deleveraging process is not over and governments cannot continue the pace of stimulus they've been undertaking," said Julius Baer & Co chief investment officer Venkatraman Anantha-Nageswaran. "We see global confidence fluctuating from month to month as growth disappoints."
Most survey respondents in Europe turned more pessimistic on the outlook for the euro, expecting it to weaken against the US dollar during the next six months.
The confidence gauge for western Europe fell to 49.8 from 55.5 last month, dropping below 50 for the first time since November.
A measure of US participants' confidence in their economy fell to 41.3 this month from 54.4 in January.
Asians outside Japan are a lot more confident, but their index still fell -- to 70.8 in February from 79.8 -- while the confidence gauge for Japan dropped to 40.6 from 44.1.