World Economic Outlook
Recovery, Risk, and Rebalancing
October 2010
World Economic and Financial Surveys
©2010 International Monetary Fund
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The World Economic Outlook (WEO) presents the IMF staff's analysis and projections of economic developments at the global level, in major country groups (classified by region, stage of development, etc.), and in many individual countries. It focuses on major economic policy issues as well as on the analysis of economic developments and prospects. It is usually prepared twice a year, as documentation for meetings of the International Monetary and Financial Committee, and forms the main instrument of the IMF's global surveillance activities. |
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Contents
| Assumptions and Conventions | |||
Preface |
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Foreword |
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Executive Summary |
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| Chapter 1. Global Prospects and Policies | |||
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| Full Text | Boxes | Figures | |||
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Stronger Activity, but Setbacks to Financial Stability Questions about the Pace of Recovery More Proactive Policies Are Needed Appendix 1.1. Commodity Market Developments and Prospects Appendix 1.2. Indicators for Tracking Growth References |
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| Chapter 2. Country and Regional Perspectives | |||
| Full Text | Boxes | Figures | |||
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Asia Is Advancing with Resilience The U.S. Recovery Is Moderating in the Face of Debt and Continued Uncertainty Europe Is Facing a Gradual and Uneven Recovery Latin America Is Sustaining Its Growth Momentum The CIS Region Is Experiencing a Modest Recovery The Middle East and North Africa Region Is Recovering Strongly Africa’s Growth Is Accelerating References |
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| Chapter 3. Will It Hurt? Macroeconomic Effects of Fiscal Consolidation | |||
| Full Text | Summary | Figures | Video | |||
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Looking At History: What Is the Short-Term Impact of Fiscal Consolidation Additional Insights from Model Simulations Long-Term Effects of Reducing Government Debt Lessons for Countries Considering Fiscal Consolidation Appendix 3.1. Data Sources Appendix 3.2. Estimation Approach Appendix 3.3. Identifying Periods of Fiscal Consolidation: The Standard Approach versus the Action-Based Approach References |
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| Chapter 4. Do Financial Crises Have Lasting Effects on Trade? | |||
| Full Text | Summary | Boxes | Figures | Video | |||
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Has Trade Recovered? Trade Dynamics following Previous Crises What Factors Are Associated with Postcrisis Import Dynamics? Summary and Implications for the Outlook Appendix 4.1. Data Sources Appendix 4.2. Methodology and Robustness Tests References |
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| Annex: IMF Executive Board Discussion of the Outlook, September 2010 | |||
| Statistical Appendix | |||
| Assumptions | |||
| What's New | |||
| Data and Conventions | |||
| Classification of Countries | |||
| General Features and Composition of Groups in the World Economic Outlook Classification | |||
| Emerging and Developing Economies | |||
| List of Tables Part A | |||
| Output (Tables A1–A4) | |||
| Inflation (Tables A5–A7) | |||
| Financial Policies (Table A8) | |||
| Foreign Trade (Table A9) | |||
| Current Account Transactions (Tables A10–A12) Advanced Economies: Balance on Current Account (Table A11, corrected 01/12/11) |
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| Balance of Payments and External Financing (Tables A13– A15) |
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| Flow of Funds (Table A16) | |||
| Medium–Term Baseline Scenario (Table A17) | |||
| List of Tables Part B (available on the web only) | |||
| Output (Tables B1–B2) | |||
| Inflation (Tables B3–B4) | |||
| Financial Policies (Tables B5–B10) | |||
| Foreign Trade (Tables B11–B13) | |||
| Current Account Transactions (Tables B14–B17) | |||
| Balance of Payments and External Financing (Tables B18–B20) | |||
| External Debt and Debt Service (Tables B21–B25) | |||
| Medium-Term Baseline Scenario (Table B26) | |||
| Boxes | |||
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Chart Chart |
Data Data |
1.1 | Does Slow Growth in Advanced Economies Necessarily Imply Slow Growth in Emerging Economies? |
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Chart Chart Chart Chart Chart Chart |
Data Data Data Data Data Data |
1.2 | Dismal Prospects for the Real Estate Sector |
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Chart Chart Chart Chart |
Data Data Data Data |
1.3 | Inferring Potential Output from Noisy Data: The Global Projection Model View |
| Chart | Data | 1.4 | Uncoordinated Rebalancing |
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Chart Chart |
Data Data |
1.5 | Have Metals Become More Scarce, and What Does Scarcity Mean for Prices? |
| Chart | Data | 2.1 | Emerging Asia: Responding to Capital Inflows |
| Chart | Data | 2.2 | Latin America-5: Riding Another Wave of Capital Inflows |
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Chart Chart Chart |
Data Data Data |
4.1 | The Role of the Composition Effect and Intermediate Goods in the Great Trade Collapse |
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Chart Chart Chart |
Data Data Data |
4.2 | Protectionism in the Recent Crisis |
| A.1 | Economic Policy Assumptions Underlying the Projections for Selected Economies | ||
| Tables | |||
| 1.1 | Overview of the World Economic Outlook Projections | ||
| 1.2 | Global Oil Demand and Production by Region | ||
| 1.3 | Data Summary and Model Evaluation | ||
| 2.1 | Selected Asian Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment | ||
| 2.2 | Selected Advanced Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment | ||
| 2.3 | Selected European Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment | ||
| 2.4 | Selected Western Hemisphere Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment | ||
| 2.5 | Commonwealth of Independent States: Real GDP, Consumer Prices, Current Account Balance, and Unemployment | ||
| 2.6 | Selected Middle East and North African Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment (corrected 01/12/11) | ||
| 2.7 | Selected Sub-Saharan African Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment | ||
| 3.1 | Long-Term Effects of a Permanent 10 Percentage Point Decrease in the G3 Government-Debt-to-GDP Ratio: Global Integrated Monetary and Fiscal Model Simulations | ||
| 3.2 | Data Sources | ||
| 3.3 | Action-Based Approach: Episodes of Small Fiscal Contraction | ||
| 3.4 | Action-Based Approach: Episodes of Large Fiscal Contraction | ||
| 3.5 | Large Fiscal Contraction Episodes Identified by Alesina and Ardagna (2010) | ||
| 4.1 | Baseline Regressions and Implied Changes in the Levels of Imports and Exports | ||
| 4.2 | Estimated Elasticity of Imports | ||
| 4.3 | Systemic Banking Crises, 2007–09 | ||
| 4.4 | Data Sources | ||
| 4.5 | Country Groupings | ||
| 4.6 | Unconditional Import Losses: Estimated Impulse Response Functions Using Alternative Methodologies | ||
| 4.7 | Estimated Elasticity of Imports to Output: Panel Regression with Country and Time Dummies | ||
| 4.8 | Conditional Import Losses: Robustness of Estimated Impulse Response Functions | ||
| 4.9 | Import Losses and Composition Effects | ||
| Figures | |||
| Chart | Data | 1.1 | Current and Forward-Looking Indicators |
| Chart | Data | 1.2 | Global Indicators |
| Chart | Data | 1.3 | Recent Financial Market Developments |
| Chart | Data | 1.4 | Developments in Mature Credit Markets |
| Chart | Data | 1.5 | Emerging Market Conditions |
| Chart | Data | 1.6 | Public Sector Financing |
| Chart | Data | 1.7 | External Developments |
| Chart | Data | 1.8 | Prospects for Near-Term Activity |
| Chart | Data | 1.9 | Recovery Dynamics |
| Chart | Data | 1.10 | Balance Sheets and Saving Rates |
| Chart | Data | 1.11 | Measures of Monetary Policy and Liquidity in Selected Advanced Economies |
| Chart | Data | 1.12 | General Government Fiscal Balances and Public Debt |
| Chart | Data | 1.13 | Global Outlook |
| Chart | Data | 1.14 | Global Inflation |
| Chart | Data | 1.15 | Risks to the Global Outlook |
| Chart | Data | 1.16 | Inflation, Deflation Risk, and Unemployment |
| Chart | Data | 1.17 | Global Imbalances |
| Chart | Data | 1.18 | Medium-Term Fiscal Policies |
| Chart | Data | 1.19 | Commodity and Petroleum Prices |
| Chart | Data | 1.20 | World Energy Market Developments |
| Chart | Data | 1.21 | Developments in Base Metal Markets |
| Chart | Data | 1.22 | Recent Developments in Markets for Major Food Crops |
| Chart | Data | 1.23 | Growth Tracker |
| Chart | Data | 1.24 | Stylized Example Illustrating Heat Map Colors |
| Chart | Data | 2.1 | Average Projected Real GDP Growth during 2010–11 |
| Chart | Data | 2.2 | Asia: Average Projected Real GDP Growth during 2010–11 |
| Chart | Data | 2.3 | Asia: Leading the Global Recovery |
| Chart | Data | 2.4 | United States and Canada: Differing Fortunes |
| Chart | Data | 2.5 | United States and Canada: Average Projected Real GDP Growth during 2010–11 |
| Chart | Data | 2.6 | Europe: Average Projected Real GDP Growth during 2010–11 |
| Chart | Data | 2.7 | Europe: A Gradual and Uneven Recovery |
| Chart | Data | 2.8 | Latin America and the Caribbean: Average Projected Real GDP Growth during 2010–11 |
| Chart | Data | 2.9 | Latin America and the Caribbean (LAC): Advancing with Strength |
| Chart | Data | 2.10 | Commonwealth of Independent States: Average Projected Real GDP Growth during 2010–11 |
| Chart | Data | 2.11 | Commonwealth of Independent States (CIS): A Modest Recovery |
| Chart | Data | 2.12 | Middle East and North Africa: Average Projected Real GDP Growth during 2010–11 |
| Chart | Data | 2.13 | Middle East and North Africa (MENA): Recovering Strongly |
| Chart | Data | 2.14 | Sub-Saharan Africa: Average Projected Real GDP Growth during 2010–11 |
| Chart | Data | 2.15 | Sub-Saharan Africa (SSA): Growth is Accelerating |
| Chart | Data | 3.1 | Action-Based Fiscal Consolidation |
| Chart | Data | 3.2 | Impact of a 1 Percent of GDP Fiscal Consolidation on GDP and Unemployment |
| Chart | Data | 3.3 | Response of Monetary Conditions to a 1 Percent of GDP Fiscal Consolidation |
| Chart | Data | 3.4 | Impact of a 1 Percent of GDP Fiscal Consolidation of GDP Components |
| Chart | Data | 3.5 | Impact of a 1 Percent of GDP Fiscal Consolidation: Taxes versus Spending |
| Chart | Data | 3.6 | Composition and Monetary Conditions: Impact of a 1 Percent of GDP Fiscal Consolidation |
| Chart | Data | 3.7 | Composition and Monetary Conditions: Impact of a 1 Percent of GDP Fiscal Consolidation |
| Chart | Data | 3.8 | Impact on GDP of a 1 Percent of GDP Spending-Based Consolidation |
| Chart | Data | 3.9 | Estimated Impact on GDP of a 1 Percent of GDP Fiscal Consolidation |
| Chart | Data | 3.10 | Impact of Large Fiscal Consolidation on GDP and Unemployment: Action-Based Approach versus Standard Approach |
| Chart | Data | 3.11 | Impact of a 1 Percent of GDP Fiscal Consolidation: GIMF Simulations |
| Chart | Data | 3.12 | Impact of a 1 Percent of GDP Fiscal Consolidation: GIMF Simulations |
| Chart | Data | 3.13 | Robustness: Impact on GDP of a 1 Percent of GDP Fiscal Consolidation |
| Chart | Data | 3.14 | Robustness: Impact on GDP of a 1 Percent of GDP Fiscal Consolidation |
| Chart | Data | 3.15 | Size of Fiscal Consolidation: Action-Based Approach versus Standard Approach |
| Chart | Data | 4.1 | The Great Trade Collapse |
| Chart | Data | 4.2 | The Recovery in Trade |
| Chart | Data | 4.3 | Trade Dynamics in Different Product Groups |
| Chart | Data | 4.4 | Import and Export Losses, Not Controlling for Output |
| Chart | Data | 4.5 | Import and Export Losses, Controlling for Output |
| Chart | Data | 4.6 | Import Losses in Different Product Groups, Controlling for Output |
| Chart | Data | 4.7 | Import Losses and Production Linkages, Controlling for Output |
| Chart | Data | 4.8 | Trade Losses during Global Downturn |
| Chart | Data | 4.9 | Precrisis Characteristics and Import Losses, Controlling for Output |
| Chart | Data | 4.10 | The Postcrisis Evolution of Various Mechanisms |
| Chart | Data | 4.11 | Decomposition of Import Losses |
| Chart | Data | 4.12 | Import Losses and Composition Effects |
| Chart Chart |
Data Data |
4.13 | Postcrisis Characteristics and Import Losses, Controlling for Output |
| Chart | Data | 4.14 | Import Losses, Not Controlling for Output: Alternative Methodologies |
| Chart | Data | 4.15 | Import Losses, Controlling for Output: Robustness |
| Chart | Data | 4.16 | The Postcrisis Evolution of Various Components of GDP |