Confidence in global economy hits new low in Q3

Confidence in the world economy slipped to a new low in the third quarter due to the slowdown in the economic growth in the United States and China and the lingering crisis in the euro zone, according to the latest Global Confidence Index of the World Economic Forum.

Results of the Global Confidence Index showed that in the third quarter, 72 percent of the respondents said they lacked confidence in the state of the world economy in the next 12 months, up from 37 percent in the previous quarter.

This was the most pessimistic since the WEF started the confidence index five quarters ago.

The fifth Global Confidence Index polled 430 experts from business, government, international organizations and academia who are members of the WEF’s Network of Global Agenda Councils.

According to the results, 68 percent viewed that a significant economic disruption was “likely” or “very likely” over the next 12 months, a big jump from 46 percent in the second quarter.

“Despite every effort to ensure economic, social and political stability, we are still just one shock away from everything getting off track again – which points to the need for greater resilience globally,” WEF managing director Lee Howell said in a statement.

A private economist, meanwhile, said that developing countries like the Philippines could benefit from this gloomy world economic outlook as investors look for safe havens.

“The negative global economic outlook can make businessmen and investors more cautious and passive when making decisions,” Cid Terosa of the University of Asia and the Pacific said.

“Developing countries, however, can benefit from the desire of investors to look for relatively safe and stable havens for their investments. The Philippines could be one of those countries,” Terosa added.

Terosa also said that the government should maintain the country’s strong macro fundamentals as the Philippines strives to provide a conducive business and investment environment.

The Philippines expanded 6.4 percent in the first quarter, considered as the fastest in Southeast Asia. The country’s performance in the second quarter will be released on Aug. 30.