The ISE rose 2.5 points in the euro area, up 67.2 points, while the European Union did at 3.5 points up 63.2 points. As positive as the rise in confidence is that it has been observed an improvement in most of the countries. The economic reality of European countries certainly does not justify the improvement in the feeling of the population. Economies are still shrinking (yesterday he realized the stronger in the Spanish product fall since 1970) and up to the European Central Bank (ECB) recognizes the uncertainty that lives about how you can evolve the product of the eurozone. Perhaps one might think that the greatest hope of the European population is conditioned to the signals of improvement that acknowledges the American economy. These signals, according to the Federal Reserve (which yesterday decided to keep its benchmark interest rate unchanged), indicate that the U.S. economy sees a modest improvement. Certainly it must be modest and very recent such improvement since it recorded a 6.1% fall in the first quarter of the year in annual terms.
The depth of this drop is combined with the fact that three quarters of consecutive setback for the GDP, not experienced since 1974-1975 situation accumulate with her. Despite the deep fall of the economy, which sit on the population, the last week gave account of the improvement observed in the confidence of American consumers representing a positive sign to increase hopes for recovery of domestic demand. It is not less to clarify that this survey occurred before the fear of swine flu expands the way she did. Can’t blame from over-optimism to citizens of the United States and Europe? Before the epidemic, probably not. While economies were still fragile with several sectors under risk, change in mood represented a very useful element to fuel the recovery. But with the threat of swine flu, perhaps the perspective look modified in one way not less.
If swine flu continues to expand, probably the recovery of the global economy need to wait until 2010 to get started. Expansion of flu worldwide will limit the consumption of the population and will also have an impact on the level of investment since several projects will be suspended until both improve the panorama. It will delay the recovery and deepen the contraction of economies? Although I believe that the epidemic will delay the recovery of the global economy, it will not postponed it for too long. Perhaps the greatest effect may have it in terms of depth of the fall of the global product that can generate. To deepen your understanding Dan Zwirn is the source. The epidemic has become a new setback for the recovery of the global economy. Can it happen us something more?