World Economic Outlook
Rebalancing Growth
April 2010
©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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Joint Foreword to World Economic Outlook and Global Financial Stability Report |
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Executive Summary |
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| Chapter 1. Global Prospects and Policies | ||||
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Recovery Is Stronger than Expected, but Speed Varies Financial Conditions Are Easing, but Not for All Sectors Capital Is Again Flowing to Emerging Economies Policy Support Has Been Essential in Fostering Recovery Multispeed Recovery to Continue during 2010-11 Inflation Pressures Are Generally Subdued but Diverge Important Risks Remain amid Sharply Diminished Room for Policy Maneuvers Policies Need to Sustain and Strengthen Recovery Global Demand Rebalancing: The Role of Credibility and Policy Coordination Appendix 1.1. Commodity Market Developments and Prospects References |
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| Chapter 2. Country and Regional Perspectives | ||||
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A Stimulus-Driven U.S. Recovery Is under Way Asia Is Staging a Vigorous and Balanced Recovery Europe Is Facing an Uneven Recovery and Complex Policy Challenges The CIS Economies Are Recovering at a Moderate Pace Latin America and the Caribbean Are Recovering at a Robust Pace The Middle East and North Africa Region Is Recovering at a Good Pace Africa Is Coming through the Crisis Well |
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| Chapter 3. Unemployment Dynamics during Recessions and Recoveries: Okun's Law and Beyond | ||||
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Broad Labor Market Dynamics during the Great Recession Using Okun's Law as a Framework Step 1: Okun's Law across Countries and over Time Step 2: Analyzing Unemployment Rate "Forecast Errors" The Key Issues: Drivers of Great Recession Dynamics and Recovery Prospects Conclusions and Implications for the Recovery Appendix 3.1. Data Sources and Construction Appendix 3.2. Methodological Details Appendix 3.3. Analysis on Dynamic Betas Derived from the Employment Version of Okun's Law Appendix 3.4. Regression Results Using Employment Forecast Errors and a Static Okun's Law Specification Appendix 3.5. Vector Autoregression Forecasting Methodology References |
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| Chapter 4. Getting the Balance Right: Transitioning out of Sustained Current Account Surpluses | ||||
| Full Text | Summary | Boxes | Figures | Video | ||||
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Surplus Reversals: Definition and Anatomy Are Policy-Driven Surplus Reversals Detrimental to Growth? Surplus Reversals: Case Studies Lessons for Economies Considering a Transition out of External Surpluses Appendix 4.1. Sample of Countries and Data Sources Appendix 4.2. Scoring Method Used to Group Economies References |
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| Annex: IMF Executive Board Discussion of the Outlook, April 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 | ||||
| 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) | ||||
| 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 | ||||
| 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) | ||||
| World Economic Outlook, Selected Topics | ||||
| Boxes | |||
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1.1 | Lessons from the Crisis: On the Choice of Exchange Rate Regime |
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1.2 | How Unusual Is the Current Commodity Price Recovery? |
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1.3 | Commodity Futures Price Curves and Cyclical Market Adjustment |
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3.1 | The Dualism between Temporary and Permanent Contracts: Measures, Effects, and Policy Issues |
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3.2 | Short-Time Work Programs |
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4.1 | Japan after the Plaza Accord |
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4.2 | Taiwan Province of China in the Late 1980s |
| A.1 | Economic Policy Assumptions Underlying the Projections for Selected Economies | ||
| Tables | |||
| 1.1 | Overview of the World Economic Outlook Projections | ||
| 1.2 | Commodity Price Developments | ||
| 1.3 | Global Oil Demand and Production by Region | ||
| 2.1 | Selected Advanced Economies: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.2 | Advanced Economies: Unemployment | ||
| 2.3 | Selected Asian Economies: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.4 | Selected European Economies: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.5 | Commonwealth of Independent States: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.6 | Selected Western Hemisphere Economies: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.7 | Selected Middle East and North African Economies: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.8 | Selected Sub-Saharan African Economies: Real GDP, Consumer Prices, and Current Account Balance | ||
| 3.1 | Factors Influencing the Responsiveness of Changes in Unemployment to Changes in Output | ||
| 3.2 | Unemployment Forecast Errors during Recessions | ||
| 3.3 | Unemployment Forecast Errors during Recoveries | ||
| 3.4 | Data Sources | ||
| 3.5 | Okun's Law Lag Lengths (Great Recession) | ||
| 3.6 | Factors Influencing the Responsiveness of Changes in Employment to Changes in Output | ||
| 3.7 | Employment Forecast Errors during Recessions | ||
| 3.8 | Employment Forecast Errors during Recoveries | ||
| 3.9 | Regressions using Forecast Errors Based on Static Version of Okun's Law | ||
| 4.1 | Decomposition of Current Account Surplus Reversals | ||
| 4.2 | Exchange Rate Developments during Current Account Surplus Reversals | ||
| 4.3 | Structural Reallocation during Current Account Surplus Reversals | ||
| 4.4 | Estimation Results: Change in Growth after Current Account Surplus Reversals | ||
| 4.5 | Historical Current Account Surplus Reversal Episodes: Relevance for Today's Current Account Surplus Economies | ||
| 4.6 | Case Studies: Policies Used during Current Account Surplus Reversals | ||
| 4.7 | Case Studies: Key Indicators after Current Account Surplus Reversals | ||
| 4.8 | Sample of Analysis and Current Account Surplus Episodes | ||
| 4.9 | Data Sources | ||
| Figures | |||
| Chart | Data | 1.1 | Current and Forward-Looking Indicators |
| Chart | Data | 1.2 | Global Indicators |
| Chart | Data | 1.3 | Developments in Mature Credit Markets |
| Chart | Data | 1.4 | Emerging Market Conditions |
| Chart | Data | 1.5 | External Developments |
| Chart | Data | 1.6 | Global Imbalances |
| Chart | Data | 1.7 | General Government Fiscal Balances and Public Debt |
| Chart | Data | 1.8 | Measures of Monetary Policy and Liquidity in Selected Advanced Economies |
| Chart | Data | 1.9 | Prospects for Near-Term Activity |
| Chart | Data | 1.10 | Emerging Economies: GDP Growth by Recession Episode |
| Chart | Data | 1.11 | Global Outlook |
| Chart | Data | 1.12 | Global Inflation |
| Chart | Data | 1.13 | Inflation, Deflation Risk, and Unemployment |
| Chart | Data | 1.14 | Risks to the Global Outlook |
| Chart | Data | 1.15 | Downside Scenario: A Loss of Momentum |
| Chart | Data | 1.16 | Medium-Term Growth Prospects and Precrisis Currency Valuations |
| Chart | Data | 1.17a | Fiscal Consolidation Packages Designed to Raise Potential Output under Different Assumptions about Credibility |
| Chart | Data | 1.17b | Scenarios Designed to Raise Potential Output and Reduce Government Deficits |
| Chart | Data | 1.18 | Commodity and Petroleum Prices |
| Chart | Data | 1.19 | World Energy Market Developments |
| Chart | Data | 1.20 | Developments in Metal Markets |
| Chart | Data | 1.21 | Recent Developments in Markets for Major Food Crops |
| Chart | Data | 2.1 | Average Projected Real GDP Growth during 2010-11 |
| Chart | Data | 2.2 | Decomposing the Variation in 2010-11 Growth Projections |
| Chart | Data | 2.3 | United States: A Stimulus-Supported Recovery |
| Chart | Data | 2.4 | Asia: Average Projected Real GDP Growth during 2010-11 |
| Chart | Data | 2.5 | Asia: A Vigorous and Balanced Rebound |
| Chart | Data | 2.6 | Europe: Average Projected Real GDP Growth during 2010-11 |
| Chart | Data | 2.7 | Europe: A Moderate Recovery Held Back by Fiscal and External Imbalances |
| Chart | Data | 2.8 | Commonwealth of Independent States: Average Projected Real GDP Growth during 2010-11 |
| Chart | Data | 2.9 | Commonwealth of Independent States: A Modest Recovery Ahead |
| Chart | Data | 2.10 | Latin America and the Caribbean: Average Projected Real GDP Growth during 2010-11 |
| Chart | Data | 2.11 | Latin America and the Caribbean: A Robust 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: Growing out of Its Downturn |
| Chart | Data | 2.14 | Sub-Saharan Africa: Average Projected Real GDP Growth during 2010-11 |
| Chart | Data | 2.15 | Sub-Saharan Africa: Rebounding Strongly |
| Chart | Data | 3.1 | Change in Unemployment Rates and Output Declines during the Great Recession |
| Chart | Data | 3.2 | Broad Measures of Unemployment |
| Chart | Data | 3.3 | Evolution of Employment, Unemployment, and Labor Participation |
| Chart | Data | 3.4 | Labor Dynamics in the United States, Germany, and Japan |
| Chart | Data | 3.5 | Relationship between Unemployment and Output over Time |
| Chart | Data | 3.6 | Output per Capita and Employment Rate Responses during Past Recessions |
| Chart | Data | 3.7 | Dynamic Betas: The Long-Term Impact of Output Fluctuations on Unemployment Rate Dynamics |
| Chart | Data | 3.8 | Decomposition of the Actual Change in the Unemployment Rate during the Great Recession |
| Chart | Data | 3.9 | Decomposition of the Cumulative Change in the Unemployment Rate during the Great Recession |
| Chart | Data | 3.10 | How Long before Employment Recovers? |
| Chart | Data | 3.11 | Forecasts of Employment, Unemployment Rate, and GDP for Advanced Economies, Based on Okun's Law |
| Chart | Data | 3.12 | Dispersion of GDP Consensus Forecasts |
| Chart | Data | 3.13 | Forecasts of Employment, Unemployment Rate, and GDP for Advanced Economies, Based on Vector Autoregression |
| Chart | Data | 4.1 | Global Imbalances |
| Chart | Data | 4.2 | Methodology Example (Korea 1989) |
| Chart | Data | 4.3 | Output and Employment Growth during Surplus Reversals |
| Chart | Data | 4.4 | Change in Growth after Surplus Reversals |
| Chart | Data | 4.5 | Contributions to Growth |
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4.6 | Case Studies: Pretransition Initial Conditions |
| Chart | Data | 4.7 | Case Studies: Posttransition Implications |
| Chart | Data | 4.8 | Japan at the End of Bretton Woods |