In May, the Economic Sentiment Indicator (ESI) decreased further in the EU and stands below its long-term average. The decrease in the sentiment indicator for the EU is due to lower confidence in manufacturing and construction and among consumers, while confidence in retail trade improved and remained stable in services. Data shows that services and consumers are the only two exceptions where EU confidence for each sector has still been below its long- term averages for a few months. (Business and Consumer Survey results May 2008, European Commission)

According to the latest Results of the Ifo World Economic Survey (WES), the World Economic Climate has worsened further in the second quarter of 2008, the indicator having fallen to its lowest level in six years. The decline is mainly due to more unfavourable assessments of the current economic situation, but also the expectations for the coming six months have again been revised downwards. The worsening in the Ifo World Economic Climate has again affected above all North America and Western Europe. The strongest decline in the climate indicator, as in the previous survey, was in the US. Here, however, the fall was attributable exclusively to the clearly less favourably assessments of the current situation whereas the expectations for the coming six months are no longer quite so pessimistic. The climate indicator has also fallen in Asia, especially in South Korea and Hong Kong. Also in Japan negative economic expectations (Latest Results of the Ifo World Economic Survey (WES) of 2nd quarter 2008 in co-operation with the International Chamber of Commerce (ICC), Paris) (Refer the slides below for more details)