The global economic climate is at its brightest since 2007, but there may be trouble ahead, according to the latest quarterly World Economic Survey by the International Chamber of Commerce (ICC) and the Munich-based Ifo Institute for Economic Research.

The survey put Bangladesh alongside major Asian economies such as Hong Kong and Malaysia, news agency BSS reports. “In Bangladesh, Hong Kong and Malaysia and Sri Lanka, the present economic situation is assessed as favourable according to WES results,” the survey said.
Topping the last quarters four-year high, the ICC/Ifo world climate indicator reached 107.7 points in April, far above its 1995-2010 average of 96.9.

The figure, based on a survey of over 1,000 economists in 120 countries, combines respondents increasingly positive appraisals of their countries economic situation with their outlook for the next six months, which dips slightly while remaining confident.

Emerging economies such as China, Turkey and some Latin American countries are particularly concerned by high inflation as prices soar, the report said.

Survey respondents from Brazil were especially worried that their strong currency could lead to a loss of competitiveness or a process of deindustria-lisation.

On average, worldwide consumer prices are expected to rise by 3.8 percent over the year, up from 3.4 percent forecast in early 2011, the report said.

“The upswing of the world economy continues, but one should nevertheless be aware of the risks,” said Gernot Nerb, Ifo director of Business Surveys.

“Downward risks for positive development have gained weight during the last months. If downside risks do not materialise, this could be a sustainable track for the world economy.”
ICC Secretary General Jean-Guy Carrier said: “The ICC/Ifo findings are an encouraging sign that the global economy is still recovering. But they also show growing anxiety about public deficits that have built up since the financial crisis.”

“And if governments struggling to reduce their debts resort to increasing protectionism — theres a real danger that further global economic recovery could stall. Governments must work together and encourage a multilateral trading system that can allow the global economy to continue regaining strength.”

Among the risks that could hit the world economy in the next six months, pushing it off the road to recovery, the ICC/Ifo report cited excessive international capital movements and potential oil price shocks driven by tensions in supply.

World economic growth is expected to reach 3.2 percent in 2011, up slightly on last years level. Experts cite the main growth engines as China, India and Latin American countries such as Peru and Argentina, the report said.

In North America, waning optimism for the next six months dampened the overall economic climate slightly. But indications are still above their long-term average, and experts predict a strong rebound in employment in the US, as the pronounced imbalance between recent productivity growth and reluctant hiring is redressed.

In Asia, although the economic climate remains brighter than average, the survey shows deterioration in both economic situation and six-month expectations.

“The picture is particularly favourable in Hong Kong, India, Indonesia, Singapore and South Korea, whereas Japans economists are pessimistic following its tsunami, earthquake and nuclear disaster.”

In China, experts are cautious about future economic development, and expect capital expenditures and growth in private consumption and exports to weaken over the next six months, the report said.

Most expect trade surplus to decrease, and almost one in 10 predicts a trade deficit, the report said. “But they say Chinas key economic problem is inflation, as in most Asian countries.”
About two-thirds of the North American economists surveyed support a stronger G20 role in redressing global economic imbalances, a figure that reaches at least 75 percent in all other regions. Around 90 percent of respondents worldwide agreed on encouraging the promotion of regulatory convergence.

Economists in Africa, the Near East and Latin America showed strong support for the G20 to engage with the private sector to strengthen corporate efforts in combating corruption.