Economy Matters: The View From Here

The first quarter of 2016 is now behind us, and so far the economic news has been distinctly underwhelming...

The first quarter of 2016 is now behind us, and so far the economic news has been distinctly underwhelming. Both The World Bank and the International Monetary Fund have downgraded their growth forecasts for the year.

Economic "powerhouse" areas like South East Asia are not doing quite as well as expected. We are told that "Slow Growth is the New Normal". Except if you are in Latin America of course, where there is hardly any growth at all.

Economic forecasts are all very well, but how does it feel to people on the ground? Each month, Ipsos asks citizens around the world to give their own assessments of how things are going: how would you describe the current economic situation in your country?

Looking at the overall figures, at first it feels like quite a stable picture. Ipsos' March Economic Pulse of the World finds some 37% of consumers across 27 countries, describing the economic situation in their country as "good". In December, it was 39%. A year ago, 39%.

But what we are dealing with here is not a picture of global uniformity. Things feel very different depending on where in the world you are living.

Take Britain, for example. It now comes in at a creditable 7th place, with 49% of the public saying the economy is in "good" shape. This marks something of a transformation in recent years: in March 2013, that figure stood at just 12%. It's a finding which sheds some light on how the Conservative party was able to achieve what it did at the general election last year.

In Europe, Sweden and Germany remain the star performers, although it's worth noting that ratings are generally lower than they were in 2014 and 2015. Polish and Russian citizens are rather less positive, with favourable ratings running only in the high twenties. Russia's scores are certainly well down on the levels two years ago. But, whatever the country's economic difficulties, the picture is still more positive than in Spain, Italy and France, where we find barely one in seven willing to give their economy a "good" rating.

At the other end of the rating scale, online consumers in Saudi Arabia and India remain the most favourable of all, with over eight in ten giving the green light to their country's economic performance. India's economy has now been registering around 80% "good" ratings in our survey for 18 months now. And, with the IMF projecting it to grow by a further seven per cent this year, this is a trend which is likely to continue.

In North America, the big story is that the United States has overtaken Canada. However grumpy they may be feeling about their politicians, Americans have become gradually more positive about the state of their economy in recent years. Meanwhile, Canadians have become gloomier. The March figure of 36% "good" marks a fall from 51% in December 2015 and 61% in March last year.

But it is in Latin America where the results are most worrying. In India we saw that positive sentiment is powered by a period of growth. In recession-hit Brazil, the opposite is the case. As recently as March 2013, 48% of Brazilians gave their economy a "good" rating. Three years on, that figure stands at 7%.

And the picture elsewhere isn't great either. In Argentina our "feelgood score" has fallen from 27% to 15% in just the last three months. Mexico also lies towards the lower end of the country league table.

Perhaps things can only get better? Well, in Brazil we do find that 53% expect to see an improvement over the next six months. Could this be a lead indicator which suggests the worst is over? We need to be cautious here. Three years ago, some 70% of Brazilians thought things would improve: the economy then went into freefall. So we need some other evidence before we can start to see green shoots, and with the country currently in political turmoil, this may be hard to find.

If there's one thing this long-running Economic Pulse survey has told us, it's that the public around the world give pretty accurate assessments of how their economy is doing: when things are going well, they notice, and they tell us so in our surveys. When the economic weather gets rough, the sentiment scores go into reverse. What they are less good at is predicting how things are going to look in the future. A reminder that, although, their own track record may not be without its blemishes, there is still a need for economists.

The UK Government alone employs 1,000 of them!

Close

What's Hot