WORLD ECONOMIC AND FINANCIAL SURVEYS World Economic Outlook and International Capital Markets Interim Assessment December 1998

A Survey by the Staff of the International Monetary Fund
©1998 International Monetary Fund

The World Economic Outlook 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
Chapter I.   146k pdf file	Containing the Risks to the World Economy The Crisis Intensifies up to Early October and Then Eases Implications for the World Economic Outlook and Remaining    Risks Policy Requirements Systemic Issues Arising from Recent Financial Market    Turbulence
	Boxes
	1.1.	Brazil's Financial Assistance Package and Adjustment Program
	1.2.	Recent Developments in the Japanese Financial System
	Table
	1.1.	Revisions to World Growth Projections
	Figures
	1.1.	World Industrial Production
	1.2.	Financing Conditions for Emerging Markets
Chapter II.   196k pdf file	The Crisis in Emerging Markets Russia's Financial Crisis Deleveraging and the Terms and Conditions of Market Access Spillover Effects Among Emerging Markets: The Extent of    Differentiation
	Boxes
	2.1.	Malaysia's Capital Controls
	2.2.	Hong Kong's Intervention in the Equity Spot and Futures Markets
	Tables
	2.1.	Sovereign Credit Ratings of Emerging Market Borrowers
	2.2.	Russia in International Capital Markets
	2.3.	Emerging Markets' Debt Trading Volume
	2.4.	Emerging Market Bond Issues, Equity Issues, and Loan Commitments
	Figures
	2.1.	Emerging Markets: Maturing Eurobonds
	2.2.	Russia: Federal Government Domestic and External Debt
	2.3.	Secondary Market Bond Spreads and Equity Market Returns
	2.4.	Secondary Market Yield Spreads on U.S. Dollar-Denominated Eurobonds by Selected Emerging Markets
	2.5.	Stock Market Total Return Indices
	2.6.	Private Capital Flows to Emerging Markets
	2.7.	Brazil: Domestic Debt and Foreign Exchange Flows
	2.8.	Interest Rates, Exchange Rates, and Reserves
Chapter III.   306k pdf file	Turbulence in Mature Financial Markets Recent Developments Significance for Economic Activity Systemic Aspects of Mature Market Turbulence Shortcomings in Risk Management and Implications for    Prudential Regulation and Supervision
	Boxes
	3.1.	Recent Dollar/Yen Exchange Rate Movements
	3.2.	What Is the Implied Future Earnings Growth Rate that Would Justify Current Equity Prices in the United States?
	3.3.	Leverage
	3.4.	The Near Collapse and Rescue of Long-Term Capital Management
	3.5.	Risk Management: Progress and Problems
	3.6.	Supervisory Reforms Relating to Risk Management
	Table
	3.1.	Claims of Banks in BIS-Reporting Countries on Selected Emerging Markets as of June 1998
	Figures
	3.1.	Major Industrial Countries: Stock Market Price Indices
	3.2.	Major Industrial Countries: Nominal Interest Rates
	3.3.	United States: Yields on Corporate and Treasury Bonds
	3.4.	United States: Corporate Bond Market
	3.5.	United States: Developments in Fixed-Income Securities Markets
	3.6.	Major Industrial Countries: Effective Exchange Rates
	3.7.	Selected Countries: Bilateral U.S. Dollar Exchange Rates
	3.8.	United States: Equity Market Performance
Chapter IV.   127k pdf file	Implications for the World Economy: Revisions and Risks to the Projections Key Revisions to the Projections Japan and Emerging Market Economies in Asia: When Will    the Recessions End? Effects of the Russian Crisis on the Domestic Economy and    Other Countries in Transition Brazil and Other Emerging Market Economies: Effects of the    Global Crisis North America and Europe: To What Extent Is Growth    Slowing? Global Financial Flows and Current Account Balances Alternative Scenario
	Box
	4.1.	Is China's Growth Overstated?
	Tables
	4.1.	Overview of the World Economic Outlook Projections
	4.2.	Advanced Economies: Real GDP, Consumer Prices, and Unemployment Rates
	4.3.	Selected Advanced Economies and Regions: Importance of Merchandise Export Markets in 1996
	4.4.	Selected Regions: Importance of Merchandise Export Markets in 1996
	4.5.	Selected Asian Economies: Macroeconomic Indicators
	4.6.	Selected Developing Countries: Real GDP and Consumer Prices
	4.7.	Countries in Transition: Real GDP and Consumer Prices
	4.8.	Selected Latin American Economies: Macroeconomic Indicators
	4.9.	Developing Countries, Countries in Transition, and Selected Newly Industrialized Asian Economies: Net Capital Flows
	4.10.	Selected Economies: Current Account Positions
	4.11.	Alternative Scenario: Simulation Results
	Figures
	4.1.	Prices of Crude Petroleum and Nonfuel Commodities
	4.2.	Major Industrial Countries: Indices of Monetary Conditions
	4.3.	Selected European Countries, Japan, and the United States: Indicators of Consumer and Business Confidence
	4.4.	Selected Economies: Export Market Growth
	4.5.	Major Industrial Countries: Output Gaps
	4.6.	United States: Private, Public, and Foreign Net Saving
	4.7.	Selected European Countries: Real Total Domestic Demand
Annex.   92k pdf file	Emerging Market Banking Systems Asia Latin America Eastern Europe and Russia
	Table
	A1.	Asia: Estimated Costs of Bank Restructuring
	Statistical Appendix Assumptions List of Tables
	World Economic Outlook and Staff Studies for the World Economic Outlook, Selected Topics, 1992–98