Berlin - A world economic confidence index released Thursday and drawn up by leading German institute dropped to its lowest level in 20 years amid worries that the global economy faced recession.

The Munich-based Ifo institute said its world economic climate survey fell in the fourth quarter to 60 points from 73.4 points in the third quarter.

"Altogether the data points to a global recession," the institute said releasing the report, adding that the expectations for the coming six months have worsened further.

"The cooling off of the Ifo world economic climate (survey) has this time affected not only the major economic regions of North America, Western Europe and Asia but also Central and Eastern Europe, Russia, Latin America and Australia," Ifo said as the fallout from the financial crisis spreads around the world.

Based on a survey of about 1,000 analysts in 91 countries, the survey's fourth quarter decline took the closely watched index down to well below its long-term average of
96.8.

The release of the Ifo survey came in the wake of a new grim warning from the US Federal Reserve about the outlook for the giant American economy and another share sell-off around the world.

The new concerns about the US economic outlook followed the publication of data showing two of the world's leading economies - the 15-member eurozone and Japan - tipping into recession.

Coinciding with the Ifo survey, Germany's influential central bank warned its in latest monthly bulletin that Europe's biggest economy faces tough times in the runup to the end of the year.

Writing in its November monthly report, the Bundesbank said Germany faces "a new setback in the final quarter" as demand contracts in key business regions.

The publication of the Ifo report also came amid new moves by national governments to launch economic stimulus packages to help their economies limp through the current crisis.

Dragging the Ifo world economic climate survey down were the index's components measuring both the current situation and the expectations six months further down the track.

However, in a breakdown of nations the institute said it detected an improvement in expectations for the US economy in six months.

Ifo said while the current economic situation in the US was seen as very unfavourable, the economic expectations for the coming six months were no longer quite so pessimistic as in the first half of the year.

The institute said that the survey also showed that inflation expectations have peaked worldwide with analysts around the world having reduced their inflation projections for the coming six months.

With inflationary pressures dwindling and economic growth contracting, the analysts responding to the Ifo survey also expect declining central bank interest rates in the coming months.

Elsewhere in the world, the institute said its economic climate indicator for Western Europe has worsened again in nearly all countries with the assessments of the current situation having been significantly revised downwards.

The economic situation, Ifo said, was particularly grim in Spain, Italy, Belgium and Ireland.

The assessments of the current situation as well as the six-month outlook have also been revised downward across Asia with the economic situation Japan, South Korea and Taiwan very bleak. (dpa)