PARIS - Global economic confidence is at a ten year high, according to the results of a survey by the Paris-based International Chamber of Commerce (ICC) and the Munich-based economic research institute Ifo.

Sustained growth was expected in all regions of the world, the ICC/Ifo World Economic Survey said.

"The overall economic climate indicator of the joint ICC/Ifo poll, conducted in January 2004, hit 7.3 out of a possible 9 its highest level since 1995,

pointing to a pronounced upswing of the world economy," the survey said.

The poll, which surveyed 1,114 economic experts in 92 countries, "is the only one of its kind to give a global overview of business confidence," a statement said.

The poll "found that the favorable global conditions are also expected to have beneficial effect on export/import performance worldwide and thus on the world trade."

The US dollar was seen by even more ICC/Ifo poll experts than in the previous two surveys as undervalued.

Short-term interest rates were expected to start rising in the course of the next six months. Central-bank interest-rate hikes were seen as more likely in the US than in the euro area.

Inflation was expected to rise, with an average 2.7% increase in consumer prices expected for the world economy in 2004 slightly lower than the latest estimate for 2003 (2.9 percent).

No change of the inflation rate was expected in the US (2.2 percent in 2004 and 2003). The expected inflation rate in the US remained clearly under the 2.5% mark that the Federal Reserve would still consider acceptable. "From this side there is no need for them to start the monetary tightening process soon," the ICC said.

The survey noted that bird flu had devastated Asia's poultry industry, "but the region's overall economy appears not to have been otherwise noticeably affected, with domestic demand forecast to strengthen in almost all Asian countries."

Among the Asian nations surveyed by the ICC/Ifo Poll, India had become the "shining star" economically.

"The recovery course taken already in the beginning of 2002 was undisturbed by the conflict in Iraq or the economic weakness in Western countries. It has also escaped the outbreak of SARS in Asia. The present economic performance of India has been assessed unanimously with the highest possible marks on the WES rating scale by all 14 surveyed economists."

The survey results "indicate that the economy in North America will remain strong. In particular, the US economy demonstrated, according to poll experts, a strong performance in January. Given the high level of consumption and corporate investments, which are foreseen to underpin further growth, the foundations for further improvement remain favourable."

Confidence in economic recovery was returning in Western Europe.

"Though the current situation is not yet seen to be satisfactory, the survey's assessments have followed a positive trend since July 2003. An improvement of the current economic state has been reported from all Western European countries, except Denmark," the survey stated.

AFP 18 February 2004