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Europe Is Flat, but the World Is Not

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Today's depressing GDP figures paint a picture of a British economy which is flat at best.

But do these official statistics chime with the experience of consumers across the country? The answer, I'm afraid to say, is an unequivocal yes. The latest Economist/Ipsos MORI Issues Index finds the economy to be, by far, the key issue Britons are worried about, followed by unemployment. Europe, by contrast, ranks 15th.

Ipsos' regular Global @dvisor Economic Pulse survey puts these British views in perspective, as David Cameron prepares to take on the G8 presidency. Some 13% of us describe the condition of the economy as "good."

By comparison with countries around the world, these are terrible figures. But when compared with the rest of Europe, they are pretty normal. Indeed the figures for France (7%), Italy (5%), Hungary (5%) and Spain (2%) are even worse. Belgium is doing a little bit better, on 21%, but it is all pretty dreary stuff.

The two exceptions - and these are big exceptions - are Germany (63%) and Sweden (57%). Given that metaphors have been a bit of a theme this week, I think we might say that Europe is a two-lane highway, with a slow lane and a fast lane, and nothing in the middle.

This final Global Ipsos Pulse survey of 2012, conducted in December, gives us a chance to take stock of how consumers around the world are feeling - looking back at both 2012 and "the pre-2008" world. And with the Davos conference taking place this week, these latest findings are timely in giving us a global perspective well away from the conference rooms and ski slopes.

The first point to note is the extreme diversity in assessments given by consumers around the world when asked to rate the state of their country's economy. This ranges from the 2% who are positive in Spain, to 82% in Saudi Arabia. We see some some big contrasts between neighbours countries. Germany's 63% compares to France's 7%, for example. In China, 64% say their economy is in "good shape." In South Korea it's 15%, and in Japan, just 6%.

A second theme emerges in the healthy assessments of the three billion-strong BRIC countries, where 53% say their economy is in good shape. Behind these numbers we have a rather European-like 26% in Russia, in contrast to India's 68%, China's 64% and Brazil's 55%.

There is a third dynamic about 2012 which raises some questions about a number of key markets in the world. Some of the strongest performers ended the year with rather more cautious assessments than recorded in January 2012. Australia has fallen from 70% saying their economy is in "good" shape to 63%, Brazil from 62% to 55%, Turkey from 55% to 47% and Argentina from 55% to 37%. And the most marked fall of all is South Africa, whose 22% score marks a 20 point fall since the start of 2012.

But perhaps America will save the day. There is what my Ipsos colleagues describe as "hesitant, but positive" progress here. And this is improvement from a low base; consumer sentiment in the US fell away very sharply post-crash. In just 18 months, a rating of 47% "good" (in April 2007) was reduced to just 11% (in November 2008). This figure now stands at 31%. Whether the 'fiscal cliff' episode will couteract some of the good news coming out of the US (for example on construction), we'll have to wait and see.

Back in Europe, one can but hope that a slowly recovering world will help stimulate struggling economies. For the moment, the mood is one of bleak midwinter. Will your local economy show improvement over the next six months? "Yes" say 3% of French consumers, 5% of Belgians, 8% of Brits and 9% of Spaniards.

With results flatlining at these levels, the 'slow lane' could soon become the hard shoulder.

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