World Economic Outlook

Subdued Demand:Symptoms and Remedies

October 2016

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WEO

The World Economic Outlook (WEO) presents IMF economists' analyses of global economic developments, issues affecting advanced, emerging, and developing economies, and topics of current interest.

Summary

Global growth is projected to slow to 3.1 percent in 2016 before recovering to 3.4 percent in 2017. The forecast, revised down by 0.1 percentage point for 2016 and 2017 relative to April, reflects a more subdued outlook for advanced economies following the June U.K. vote in favor of leaving the European Union (Brexit) and weaker-than-expected growth in the United States. These developments have put further downward pressure on global interest rates, as monetary policy is now expected to remain accommodative for longer.

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Global growth is projected to slow to 3.1 percent in 2016 before recovering to 3.4 percent in 2017. The forecast, revised down by 0.1 percentage point for 2016 and 2017 relative to April, reflects a more subdued outlook for advanced economies following the June U.K. vote in favor of leaving the European Union (Brexit) and weaker-than-expected growth in the United States. These developments have put further downward pressure on global interest rates, as monetary policy is now expected to remain accommodative for longer. Although the market reaction to the Brexit shock was reassuringly orderly, the ultimate impact remains very unclear, as the fate of institutional and trade arrangements between the United Kingdom and the European Union is uncertain. Financial market sentiment toward emerging market economies has improved with expectations of lower interest rates in advanced economies, reduced concern about China’s near-term prospects following policy support to growth, and some firming of commodity prices. But prospects differ sharply across countries and regions, with emerging Asia in general and India in particular showing robust growth and sub-Saharan Africa experiencing a sharp lowdown. In advanced economies, a subdued outlook subject to sizable uncertainty and downside risks may fuel further political discontent, with antiintegration policy platforms gaining more traction. Several emerging market and developing economies still face daunting policy challenges in adjusting to weaker commodity prices. These worrisome prospects make the need for a broad-based policy response to raise growth and manage vulnerabilities more urgent than ever.

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Front Matter

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Chapter 1: Global Prospects and Policies

Full Text News Article Video
Data
Figures
Chart Data 1.1 Global Activity Indicators
Chart Data 1.2 Global Inflation
Chart Data 1.3 Commodity and Oil Markets
Chart Data 1.4 Real Effective Exchange Rate Changes, March 2016–September 2016
Chart Data 1.5 Emerging Market Economies: Capital Flows
Chart Data 1.6 Advanced Economies: Monetary and Financial Market Conditions
Chart Data 1.7 Advanced Economies: Credit, House Prices, and Balance Sheets
Chart Data 1.8 Emerging Market Economies: Interest Rates
Chart Data 1.9 Emerging Market Economies: Equity Markets and Credit
Chart Data 1.10 Domestic Demand, Output Gap, Unemployment, and Labor Force Participation in Advanced Economies
Chart Data 1.11 Demographics
Chart Data 1.12 Advanced Economies: Growth, Investment, and Employment in Recent WEO Vintages
Chart Data 1.13 Emerging Markets: Terms-of-Trade Windfall Gains and Losses and Real Exchange Rates
Chart Data 1.14 Real per Capita Growth Rates and Convergence (1995–2020)
Chart Data 1.15 Fiscal Indicators
Chart Data 1.16 External Sector
Chart Data 1.17 Creditors versus Debtors
Chart Data 1.18 Current Account Gaps and Real Exchange Rates
Chart Data 1.19 Risks to the Global Outlook
Chart Data 1.20 Recession and Deflation Risks
Chart Data Scen.Fig.1 Unilateral and Bilateral Imposition of Tariffs on Imported Goods
Chart Data Scen.Fig.2 A Worldwide Increase in Protectionism
Chart Data 1.1.1 World Growth Projections over the Medium Term
Chart Data 1.SF.1 Commodity Market Developments
Chart Data 1.SF.2 Producer Support Estimate
Chart Data 1.SF.3 World Food Production and Consumption by Country, 2015
Chart Data 1.SF.4 Population and World Food Consumption
Chart Data 1.SF.5 Maize Yield
Chart Data 1.SF.6 Food Prices and Violent Events
Chart Data 1.SF.7 Global Food Security Index, 2016
Chart Data 1.SF.1.1 Evolution of Deals over Time by Target Region

The forces shaping the global outlook—both those operating over the short and long term—point to subdued growth for 2016 and a gradual recovery thereafter but also to downside risks. These forces include new shocks, such as Brexit; ongoing realignments in China and among commodity exporters; slow-moving trends in demographics and productivity growth, as well as noneconomic factors, such as geopolitical uncertainties.

Open Chapter 1 Full Table of Contents
Tables
  • Table 1.1. Overview of the World Economic Outlook Projections
  • Annex Table 1.1.1. Europe: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
  • Annex Table 1.1.2. Asia and Pacific: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
  • Annex Table 1.1.3. Western Hemisphere: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
  • Annex Table 1.1.4. Commonwealth of Independent States: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
  • Annex Table 1.1.5. Middle East, North Africa, Afghanistan, and Pakistan: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
  • Annex Table 1.1.6. Sub-Saharan Africa: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
  • Table 1.SF.1. Used-to-Available Land Suitable for Agriculture by Region, 2013
  • Table 1.SF.2. Food Exports
  • Table 1.SF.3. Agricultural Yield
  • Table 1.SF.4. Urban Population by Region
  • Table 1.SF.5. Net Export of Food
  • Table 1.SF.6. Share of Food and Beverages in Total Consumption, 2010
  • Table 1.SF.1.1. Impact of Land Governance and Food Security on Land Deals
Figures
Chart Data 1.1 Global Activity Indicators
Chart Data 1.2 Global Inflation
Chart Data 1.3 Commodity and Oil Markets
Chart Data 1.4 Real Effective Exchange Rate Changes, March 2016–September 2016
Chart Data 1.5 Emerging Market Economies: Capital Flows
Chart Data 1.6 Advanced Economies: Monetary and Financial Market Conditions
Chart Data 1.7 Advanced Economies: Credit, House Prices, and Balance Sheets
Chart Data 1.8 Emerging Market Economies: Interest Rates
Chart Data 1.9 Emerging Market Economies: Equity Markets and Credit
Chart Data 1.10 Domestic Demand, Output Gap, Unemployment, and Labor Force Participation in Advanced Economies
Chart Data 1.11 Demographics
Chart Data 1.12 Advanced Economies: Growth, Investment, and Employment in Recent WEO Vintages
Chart Data 1.13 Emerging Markets: Terms-of-Trade Windfall Gains and Losses and Real Exchange Rates
Chart Data 1.14 Real per Capita Growth Rates and Convergence (1995–2020)
Chart Data 1.15 Fiscal Indicators
Chart Data 1.16 External Sector
Chart Data 1.17 Creditors versus Debtors
Chart Data 1.18 Current Account Gaps and Real Exchange Rates
Chart Data 1.19 Risks to the Global Outlook
Chart Data 1.20 Recession and Deflation Risks
Chart Data Scen.Fig.1 Unilateral and Bilateral Imposition of Tariffs on Imported Goods
Chart Data Scen.Fig.2 A Worldwide Increase in Protectionism
Chart Data 1.1.1 World Growth Projections over the Medium Term
Chart Data 1.SF.1 Commodity Market Developments
Chart Data 1.SF.2 Producer Support Estimate
Chart Data 1.SF.3 World Food Production and Consumption by Country, 2015
Chart Data 1.SF.4 Population and World Food Consumption
Chart Data 1.SF.5 Maize Yield
Chart Data 1.SF.6 Food Prices and Violent Events
Chart Data 1.SF.7 Global Food Security Index, 2016
Chart Data 1.SF.1.1 Evolution of Deals over Time by Target Region

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Chapter 2: Global Trade: What's behind the Slowdown?

Full Text News Article Video
Data
Figures
Chart Data 2.1 World Real Trade and GDP Growth in Historical Perspective
Chart Data 2.2 World Trade in Volumes, Values, and across Countries
Chart Data 2.3 Trade Dynamics across Broad Country Groups
Chart Data 2.4 Trade Dynamics across Types of Trade and Products
Chart Data 2.5 Empirical Model: Actual and Predicted Evolution of Real Import Growth
Chart Data 2.6 Empirical Model: Difference Between Actual and Predicted Growth of Real Goods Imports
Chart Data 2.7 Empirical Model: Decomposing the Slowdown in Real Goods Import Growth
Chart Data 2.8 Structural Model: Actual and Model-Implied Evolution of Nominal Import-to-GDP Ratio
Chart Data 2.9 Trade Costs in Historical Perspective: A Top-Down Approach
Chart Data 2.10 Trade Policies in Historical Perspective
Chart Data 2.11 Logistics and Transportation Costs of Trade in Historical Perspective
Chart Data 2.12 Global Value Chains in Historical Perspective
Chart Data 2.13 Contribution of Trade Policies and Global Value Chains to the Slowdown in Real Goods Import Growth
Chart Data 2.14 Gravity Model: Global Value Chain Participation and Bilateral Sectoral Trade Growth
Chart Data Annex
2.1.1		 Nominal Import Growth across Categories of Services
Chart Data Annex
2.2.1		 Real Import Growth
Chart Data Annex
2.5.1		 Trade Finance Availability
Chart Data Annex
2.5.2		 Contribution of Trade Policies and Global Value Chains to the Slowdown in Real and Nominal Goods Import Growth
Chart Data 2.1.1 The Evolution of Trade across Industries in Major Economies
Chart Data 2.2.1 Potential Gains from Tackling Traditional Trade Barriers
Chart Data 2.2.2 Trade Policy Frontier Areas
Chart Data 2.3.1 Gains from Eliminating Tariffs and Implementing the World Trade Organization Trade Facilitation Agreement

Trade growth has slowed since 2012 relative both to its strong historical performance and to overall economic growth. This chapter finds that the overall weakness in economic activity, in particular in investment, has been the primary restraint on trade growth, accounting for up to three-fourths of the slowdown. However, other factors are also weighing on trade. The waning pace of trade liberalization and the recent uptick in protection-ism are holding back trade growth, even though their quantitative impact thus far has been limited. The decline in the growth of global value chains has also played an important part in the observed slowdown. The findings suggest that addressing the general weak-ness in economic activity, especially in investment, will stimulate trade, which in turn could help strengthen productivity and growth. In addition, given the subdued global growth outlook, further trade reforms that lower barriers, coupled with measures to mitigate the cost to those who shoulder the burden of adjustment, would boost the international exchange of goods and services and revive the virtuous cycle of trade and growth.

Open Chapter 2 Full Table of Contents
  • The Implications of Trade for Productivity and Welfare: A Primer
  • The Slowdown in Trade Growth: Key Patterns
  • Understanding the Slowdown in Trade Growth
  • Summary and Policy Implications
  • Box 2.1. Is the Trade Slowdown Contributing to the Global Productivity Slowdown? New Evidence
  • Box 2.2. The Role of Trade Policies in Reinvigorating Trade
  • Box 2.3. Potential Gains from Jump-Starting Trade Liberalization References
  • Annex 2.1. Data
  • Annex 2.2. Constructing Disaggregated Import Volume and Price Indices
  • Annex 2.3. Analysis Using an Empirical Model of Import Demand
  • Annex 2.4. Analysis Using a General Equilibrium Model
  • Annex 2.5. Analysis at the Product Level
  • Annex 2.6. Analysis Using Gravity Model of Trade
  • References
Tables
  • Table 2.1. Historical Association among Real Import Growth at the Product Level, Trade Policies, and Participation in Global Value Chains
  • Table 2.1.1. Baseline Estimation Results
  • Table 2.2.1. Trade Policy Challenges Vary across Countries
  • Annex Table 2.1.1. Data Sources
  • Annex Table 2.1.2. Sample of Economies Included in the Analytical Exercises
  • Annex Table 2.3.1. Import Content of Aggregate Demand Components
  • Annex Table 2.3.2. Empirical Model of Real Imports of Goods and Services
  • Annex Table 2.3.3. Empirical Model of Real Imports of Goods
  • Annex Table 2.3.4. Empirical Model of Real Imports of Services
  • Annex Table 2.3.5. Residuals: Real Goods Import Growth
  • Annex Table 2.3.6. Residuals: Real Services Import Growth
  • Annex Table 2.3.7. Residuals: Real Goods import Growth Controlling for Global Uncertainty, Global Financial Conditions, and Financial Stress
  • Annex Table 2.3.8. Decomposing the Decline in Real Goods Import Growth: Full Sample
  • Annex Table 2.3.9. Residuals: Real Goods Import Growth, Corrected for Potential Effect of Trade Policies on Aggregate Demand
  • Annex Table 2.3.10. Decomposing the Decline in Real Goods Import Growth Controlling for Trade Policies
  • Annex Table 2.5.1. Alternative Specifications for Real Imports in Product-Level Regressions
  • Annex Table 2.5.2. Alternative Specifications for Nominal Imports in Product-Level Regressions
  • Annex Table 2.6.1. Link between Global Value Chain Integration and Yearly Nominal Import Growth Using Gravity Model Estimated in Levels
  • Annex Table 2.6.2. Link between Global Value Chain Integration and Yearly Nominal Import Growth Using Gravity Model Estimated in Growth Rates
Figures
Chart Data 2.1 World Real Trade and GDP Growth in Historical Perspective
Chart Data 2.2 World Trade in Volumes, Values, and across Countries
Chart Data 2.3 Trade Dynamics across Broad Country Groups
Chart Data 2.4 Trade Dynamics across Types of Trade and Products
Chart Data 2.5 Empirical Model: Actual and Predicted Evolution of Real Import Growth
Chart Data 2.6 Empirical Model: Difference Between Actual and Predicted Growth of Real Goods Imports
Chart Data 2.7 Empirical Model: Decomposing the Slowdown in Real Goods Import Growth
Chart Data 2.8 Structural Model: Actual and Model-Implied Evolution of Nominal Import-to-GDP Ratio
Chart Data 2.9 Trade Costs in Historical Perspective: A Top-Down Approach
Chart Data 2.10 Trade Policies in Historical Perspective
Chart Data 2.11 Logistics and Transportation Costs of Trade in Historical Perspective
Chart Data 2.12 Global Value Chains in Historical Perspective
Chart Data 2.13 Contribution of Trade Policies and Global Value Chains to the Slowdown in Real Goods Import Growth
Chart Data 2.14 Gravity Model: Global Value Chain Participation and Bilateral Sectoral Trade Growth
Chart Data Annex
2.1.1		 Nominal Import Growth across Categories of Services
Chart Data Annex
2.2.1		 Real Import Growth
Chart Data Annex
2.5.1		 Trade Finance Availability
Chart Data Annex
2.5.2		 Contribution of Trade Policies and Global Value Chains to the Slowdown in Real and Nominal Goods Import Growth
Chart Data 2.1.1 The Evolution of Trade across Industries in Major Economies
Chart Data 2.2.1 Potential Gains from Tackling Traditional Trade Barriers
Chart Data 2.2.2 Trade Policy Frontier Areas
Chart Data 2.3.1 Gains from Eliminating Tariffs and Implementing the World Trade Organization Trade Facilitation Agreement

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Chapter 3: Global Disinflation in an Era of Constrained Monetary Policy

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Data
Figures
Chart Data 3.1 Oil Prices and Consumer Price Inflation
Chart Data 3.2 Share of Countries with Low Inflation
Chart Data 3.3 Medium-Term Inflation Expectations and Oil Prices
Chart Data 3.4 Effect of Disinflationary Shocks in Advanced Economies under Constrained Monetary Policy and Unanchored Inflation Expectations
Chart Data 3.5 Consumer Price Inflation
Chart Data 3.6 Share of Consumer Price Inflation Variation Explained by First Common Factor
Chart Data 3.7 Core Consumer Price Inflation
Chart Data 3.8 Wage Inflation in Advanced Economies
Chart Data 3.9 Sectoral Producer Prices in Advanced Economies
Chart Data 3.10 Sectoral Consumer Prices in Advanced Economies
Chart Data 3.11 Estimated Phillips Curve Parameters
Chart Data 3.12 Contribution to Inflation Deviations from Targets: Advanced Economies
Chart Data 3.13 Contribution to Inflation Deviations from Targets: Emerging Market Economies
Chart Data 3.14 Correlation of Manufacturing Slack in China, Japan, and the United States with Import Price Contribution to Inflation in Other Economies
Chart Data 3.15 Survey- and Market-Based Inflation Expectations
Chart Data 3.16 Sensitivity of Inflation Expectations to Inflation Surprises
Chart Data 3.17 Sensitivity of Inflation Expectations to Inflation Surprises and Monetary Policy Frameworks
Chart Data 3.18 Sensitivity of Inflation Expectations to Inflation Surprises before and after Adoption of Inflation Targeting
Chart Data 3.19 Sensitivity of Inflation Expectations to Inflation Surprises over Time
Chart Data 3.20 Change in Sensitivity of Inflation Expectations to Inflation Surprises
Chart Data 3.21 Average Sensitivity of Inflation Expectations to Inflation Surprises in Countries at the Effective Lower Bound
Chart Data 3.22 Sensitivity of Longer-Term Inflation Expectations to Changes in Oil Prices
Chart Data Annex
3.2.1		 Effect of Disinflationary Shocks on Core Inflation in Advanced Economies under Constrained Monetary Policy
Chart Data Annex
3.2.2		 Effect of Disinflationary Shocks on Core Inflation in Advanced Economies under Constrained Monetary Policy and Unanchored Inflation Expectations
Chart Data Annex
3.3.1		 Share of Consumer Price Inflation Variation Explained by Different Factors
Chart Data Annex
3.3.2		 First Common Factor and Commodity Prices
Chart Data Annex
3.4.1		 Contribution to Inflation Deviations from Targets Using Various Measures of Inflation Expectations
Chart Data Annex
3.4.2		 Contribution to Inflation Deviations from Targets Using Various Measures of Cyclical Unemployment
Chart Data Annex
3.4.3		 Correlation of Manufacturing Slack in China, Japan, and the United States with Import Price Contribution to Inflation in Other Economies
Chart Data 3.4.4 Correlation of China Manufacturing Slack with Import Price Contribution to Inflation in Other Economies—Results from Panel Regressions
Chart Data Annex
3.5.1		 Change in Inflation Expectations and Inflation Shocks
Chart Data Annex
3.5.2		 Sensitivity of Inflation Expectations when Controlling for Slack: Advanced Economies
Chart Data 3.1.1 Producer Price and Consumer Price Inflation in China, Japan, and the United States
Chart Data 3.1.2 Industrial Slack in China, Japan, and the United States
Chart Data 3.1.3 Decomposition for Total Producer Price Inflation for China, Japan, and the United States
Chart Data 3.2.1 Inflation Dynamics
Chart Data 3.2.2 Cyclical and Structural Indicators in Japan
Chart Data 3.2.3 Policy Indicators in Japan
Chart Data 3.3.1 Food Weights in Consumption and Per Capita GDP
Chart Data 3.3.2 World Food Prices and Consumer Food Prices
Chart Data 3.3.3 Food Prices Relative to Nonfood Prices
Chart Data 3.3.4 Food Pass-Through Coefficients for Various Country Groups
Chart Data 3.3.5 Distribution of Food Pass-Through Coefficients
Chart Data 3.4.1 Commodity Prices and Producer Prices
Chart Data 3.4.2 Contribution to Cumulative Producer Price Inflation
Chart Data 3.5.1 Forecast as Envisaged at 2009:Q2: Loss-Minimization versus Linear Reaction Function

Inflation has declined markedly in many economies over the past few years. This chapter finds that disinflation is broad based across countries, measures, and sectors—albeit larger for tradable goods than for services. The main drivers of recent disinflation are persistent economic slack and softening commodity prices. Most of the available measures of medium-term inflation expectations have not declined substantially so far. However, the sensitivity of expectations to inflation surprises—an indicator of the degree of anchoring of inflation expectations—has increased in countries where policy rates have approached their effective lower bounds. While the magnitude of this change in sensitivity is modest, it does suggest that the perceived ability of monetary policy to combat persistent disinflation may be diminishing in these economies.

Open Chapter 3 Full Table of Contents
  • A Primer on the Costs of Disinflation, Persistently Low Inflation, and Deflation Inflation Dynamics: Patterns and Recent Drivers
  • Inflation Dynamics: Patterns and Recent Drivers
  • How Well Anchored Are Inflation Expectations?
  • Summary and Policy Implications
  • Annex 3.1. Sample and Data
  • Annex 3.2. Model Simulations
  • Annex 3.3. Principal Component Analysis
  • Annex 3.4. Drivers of the Recent Decline in Inflation
  • Annex 3.5. The Effect of Inflation Shocks on Inflation Expectations
  • Box 3.1. Industrial Slack and Producer Price Inflation
  • Box 3.2. The Japanese Experience with Deflation
  • Box 3.3. How Much Do Global Prices Matter for Food Inflation?
  • Box 3.4. The Impact of Commodity Prices on Producer Price Inflation
  • Box 3.5. A Transparent Risk-Management Approach to Monetary Policy
  • References
Tables
  • Table 3.3.1. Cross-Country Determinants of Pass-Through of Free-on-Board Food Prices to Food Consumer Price Inflation
  • Annex Table 3.1.1. Sample of Advanced and Emerging Market Economies
  • Annex Table 3.1.2. Data Sources
  • Table 3.3.1. Cross-Country Determinants of Pass-Through of Free-on-Board Food Prices to Food Consumer Price Inflation
  • Annex Table 3.1.1. Sample of Advanced and Emerging Market Economies
  • Annex Table 3.1.2. Data Sources
Figures
Chart Data 3.1 Oil Prices and Consumer Price Inflation
Chart Data 3.2 Share of Countries with Low Inflation
Chart Data 3.3 Medium-Term Inflation Expectations and Oil Prices
Chart Data 3.4 Effect of Disinflationary Shocks in Advanced Economies under Constrained Monetary Policy and Unanchored Inflation Expectations
Chart Data 3.5 Consumer Price Inflation
Chart Data 3.6 Share of Consumer Price Inflation Variation Explained by First Common Factor
Chart Data 3.7 Core Consumer Price Inflation
Chart Data 3.8 Wage Inflation in Advanced Economies
Chart Data 3.9 Sectoral Producer Prices in Advanced Economies
Chart Data 3.10 Sectoral Consumer Prices in Advanced Economies
Chart Data 3.11 Estimated Phillips Curve Parameters
Chart Data 3.12 Contribution to Inflation Deviations from Targets: Advanced Economies
Chart Data 3.13 Contribution to Inflation Deviations from Targets: Emerging Market Economies
Chart Data 3.14 Correlation of Manufacturing Slack in China, Japan, and the United States with Import Price Contribution to Inflation in Other Economies
Chart Data 3.15 Survey- and Market-Based Inflation Expectations
Chart Data 3.16 Sensitivity of Inflation Expectations to Inflation Surprises
Chart Data 3.17 Sensitivity of Inflation Expectations to Inflation Surprises and Monetary Policy Frameworks
Chart Data 3.18 Sensitivity of Inflation Expectations to Inflation Surprises before and after Adoption of Inflation Targeting
Chart Data 3.19 Sensitivity of Inflation Expectations to Inflation Surprises over Time
Chart Data 3.20 Change in Sensitivity of Inflation Expectations to Inflation Surprises
Chart Data 3.21 Average Sensitivity of Inflation Expectations to Inflation Surprises in Countries at the Effective Lower Bound
Chart Data 3.22 Sensitivity of Longer-Term Inflation Expectations to Changes in Oil Prices
Chart Data Annex
3.2.1		 Effect of Disinflationary Shocks on Core Inflation in Advanced Economies under Constrained Monetary Policy
Chart Data Annex
3.2.2		 Effect of Disinflationary Shocks on Core Inflation in Advanced Economies under Constrained Monetary Policy and Unanchored Inflation Expectations
Chart Data Annex
3.3.1		 Share of Consumer Price Inflation Variation Explained by Different Factors
Chart Data Annex
3.3.2		 First Common Factor and Commodity Prices
Chart Data Annex
3.4.1		 Contribution to Inflation Deviations from Targets Using Various Measures of Inflation Expectations
Chart Data Annex
3.4.2		 Contribution to Inflation Deviations from Targets Using Various Measures of Cyclical Unemployment
Chart Data Annex
3.4.3		 Correlation of Manufacturing Slack in China, Japan, and the United States with Import Price Contribution to Inflation in Other Economies
Chart Data 3.4.4 Correlation of China Manufacturing Slack with Import Price Contribution to Inflation in Other Economies—Results from Panel Regressions
Chart Data Annex
3.5.1		 Change in Inflation Expectations and Inflation Shocks
Chart Data Annex
3.5.2		 Sensitivity of Inflation Expectations when Controlling for Slack: Advanced Economies
Chart Data 3.1.1 Producer Price and Consumer Price Inflation in China, Japan, and the United States
Chart Data 3.1.2 Industrial Slack in China, Japan, and the United States
Chart Data 3.1.3 Decomposition for Total Producer Price Inflation for China, Japan, and the United States
Chart Data 3.2.1 Inflation Dynamics
Chart Data 3.2.2 Cyclical and Structural Indicators in Japan
Chart Data 3.2.3 Policy Indicators in Japan
Chart Data 3.3.1 Food Weights in Consumption and Per Capita GDP
Chart Data 3.3.2 World Food Prices and Consumer Food Prices
Chart Data 3.3.3 Food Prices Relative to Nonfood Prices
Chart Data 3.3.4 Food Pass-Through Coefficients for Various Country Groups
Chart Data 3.3.5 Distribution of Food Pass-Through Coefficients
Chart Data 3.4.1 Commodity Prices and Producer Prices
Chart Data 3.4.2 Contribution to Cumulative Producer Price Inflation
Chart Data 3.5.1 Forecast as Envisaged at 2009:Q2: Loss-Minimization versus Linear Reaction Function

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Chapter 4: Spillovers from China’s Transition and from Migration

Full Text News Article Video
Data
Figures
Chart Data 4.1 China: GDP and Trade Growth
Chart Data 4.2 Number of International Migrants and Refugees
Chart Data 4.3 China: Global Clout and Rebalancing
Chart Data 4.4 Spillovers from China over Time
Chart Data 4.5 Impact on Exports of a 1-Percent Shock to China’s Demand after One Year
Chart Data 4.6 Decline in Average Export Growth Rate Attributed to China Demand, 2014:Q1–2015:Q3
Chart Data 4.7 China: Processing Trade
Chart Data 4.8 A Large Footprint in Commodity Markets
Chart Data 4.9 Cumulative One-Year Price Impact from a 1 Percent Shock to China’s Industrial Production
Chart Data 4.10 China: Slowdown Scenario
Chart Data 4.11 Spillovers from China
Chart Data 4.12 Transmission of Spillovers through Financial Channels
Chart Data 4.13 China: Cyclical Slowdown Scenario
Chart Data 4.14 International Migrants and Refugees
Chart Data 4.15 Migration by Age and Skill
Chart Data 4.16 Determinants of Migration
Chart Data 4.17 Females: Low Education versus High Skilled, 2000
Chart Data 4.18 Labor Market Performance
Chart Data 4.19 Germany: Present Value of Expected Future Net Fiscal Contribution by Age Group
Chart Data 4.20 Estimated Impact of Migration in More Developed Economies, 2100
Chart Data 4.21 Migration: Positive Longer-Term Growth Effects
Chart Data 4.22 Contributions of Outward Migration to Population Growth
Chart Data 4.23 Migration of Population with Tertiary Education
Chart Data 4.24 Remittances and Diasporas
Chart Data 4.1.1 China’s Ties with Low-Income and Developing Countries
Chart Data 4.3.1 Migration in Sub-Saharan Africa
Chart Data 4.3.2 Age and Education of Migrants and Origin Country Population
Chart Data 4.3.3 Top Receivers of Remittances in Sub-Saharan Africa, 2013–15

Spillovers are a key factor shaping the global outlook and the risks around it, and the growing clout of emerging markets means that they are playing an increasing role, including from noneconomic shocks. This chapter analyzes spillovers of: (i) China’s rebalancing towards more sustainable growth, and (ii) increasing migration flows. China’s transition has a direct negative impact on global demand through trade, an indirect impact through commodity prices, and an effect on asset prices. However, a well-managed transition will benefit the global economy in the long term, with more sustainable growth in China and a reduction of risks of a disruptive adjustment. China can help by accepting the slowdown and by clearly communicating its policy intentions. Countries experiencing negative spillovers can use policy buffers in the short term, but plan for adjustment and explore new opportunities to bolster trade. As for migration, it can provoke political backlash in recipient economies, but offers gains in terms of higher growth and relief from population aging. Labor market integration is key to harnessing the gains in terms of growth and migrants’ contributions to the fiscal accounts. Source countries may face negative growth effects, which can be mitigated by remittances, the benefits of diaspora networks, and policies addressing the effects of emigration of young and skilled population.

Open Chapter 4 Full Table of Contents
  • Introduction
  • The Challenges and Opportunities of Migration
  • Box 4.1. China’s Ties with Low Income and Developing Countries
  • Box 4.2. Conflicts Driving Migration: Middle East and North Africa
  • Box 4.3. Migration in Sub-Saharan Africa
  • References
Figures
Chart Data 4.1 China: GDP and Trade Growth
Chart Data 4.2 Number of International Migrants and Refugees
Chart Data 4.3 China: Global Clout and Rebalancing
Chart Data 4.4 Spillovers from China over Time
Chart Data 4.5 Impact on Exports of a 1-Percent Shock to China’s Demand after One Year
Chart Data 4.6 Decline in Average Export Growth Rate Attributed to China Demand, 2014:Q1–2015:Q3
Chart Data 4.7 China: Processing Trade
Chart Data 4.8 A Large Footprint in Commodity Markets
Chart Data 4.9 Cumulative One-Year Price Impact from a 1 Percent Shock to China’s Industrial Production
Chart Data 4.10 China: Slowdown Scenario
Chart Data 4.11 Spillovers from China
Chart Data 4.12 Transmission of Spillovers through Financial Channels
Chart Data 4.13 China: Cyclical Slowdown Scenario
Chart Data 4.14 International Migrants and Refugees
Chart Data 4.15 Migration by Age and Skill
Chart Data 4.16 Determinants of Migration
Chart Data 4.17 Females: Low Education versus High Skilled, 2000
Chart Data 4.18 Labor Market Performance
Chart Data 4.19 Germany: Present Value of Expected Future Net Fiscal Contribution by Age Group
Chart Data 4.20 Estimated Impact of Migration in More Developed Economies, 2100
Chart Data 4.21 Migration: Positive Longer-Term Growth Effects
Chart Data 4.22 Contributions of Outward Migration to Population Growth
Chart Data 4.23 Migration of Population with Tertiary Education
Chart Data 4.24 Remittances and Diasporas
Chart Data 4.1.1 China’s Ties with Low-Income and Developing Countries
Chart Data 4.3.1 Migration in Sub-Saharan Africa
Chart Data 4.3.2 Age and Education of Migrants and Origin Country Population
Chart Data 4.3.3 Top Receivers of Remittances in Sub-Saharan Africa, 2013–15

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Statistical Appendix

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Open Table of Content for Statistical Appendix
  • Assumptions
  • What's New
  • Data and Conventions
  • Country Notes
  • Classification of Countries
  • General Features and Composition of Groups in the World Economic Outlook Classification
  • Table A. Classification by World Economic Outlook Groups and Their Shares in Aggregate GDP, Exports of Goods and Services, and Population, 2015
  • Table B. Advanced Economies by Subgroup
  • Table C. European Union
  • Table D. Emerging Market and Developing Economies by Region and Main Source of Export Earnings
  • Table E. Emerging Market and Developing Economies by Region, Net External Position, and Status as Heavily Indebted Poor Countries and Low-Income Developing Countries
  • Table F. Economies with Exceptional Reporting Periods
  • Table G. Key Data Documentation
  • Box A1. Economic Policy Assumptions Underlying the Projections for Selected Economies
List of Tables Part A (Download PDF)
  • Table A1. Summary of World Output
  • Table A2. Advanced Economies: Real GDP and Total Domestic Demand
  • Table A3. Advanced Economies: Components of Real GDP
  • Table A4. Emerging Market and Developing Economies: Real GDP
  • Table A5. Summary of Inflation
  • Table A6. Advanced Economies: Consumer Prices
  • Table A7. Emerging Market and Developing Economies: Consumer Prices
  • Table A8. Major Advanced Economies: General Government Fiscal Balances and Debt
  • Table A9. Summary of World Trade Volumes and Prices
  • Table A10. Summary of Current Account Balances
  • Table A11. Advanced Economies: Balance on Current Account
  • Table A12. Emerging Market and Developing Economies: Balance on Current Account
  • Table A13. Summary of Financial Account Balances
  • Table A14. Summary of Net Lending and Borrowing
  • Table A15. Summary of World Medium-Term Baseline Scenario
List of Tables Part B (Download PDF - available on the web only)
  • Table B1. Advanced Economies: Unemployment, Employment, and Real GDP per Capita
  • Table B2. Emerging Market and Developing Economies: Real GDP
  • Table B3. Advanced Economies: Hourly Earnings, Productivity, and Unit Labor Costs in Manufacturing
  • Table B4. Emerging Market and Developing Economies: Consumer Prices
  • Table B5. Summary of Fiscal and Financial Indicators
  • Table B6. Advanced Economies: General and Central Government Net Lending/Borrowing and General Government Net Lending/Borrowing Excluding Social Security Schemes
  • Table B7. Advanced Economies: General Government Structural Balances
  • Table B8. Emerging Market and Developing Economies: General Government Net Lending/Borrowing and Overall Fiscal Balance
  • Table B9. Emerging Market and Developing Economies: General Government Net Lending/Borrowing
  • Table B10. Selected Advanced Economies: Exchange Rates
  • Table B11. Emerging Market and Developing Economies: Broad Money Aggregates
  • Table B12. Advanced Economies: Export Volumes, Import Volumes, and Terms of Trade in Goods and Services
  • Table B13. Emerging Market and Developing Economies by Region: Total Trade in Goods
  • Table B14. Emerging Market and Developing Economies by Source of Export Earnings: Total Trade in Goods
  • Table B15. Summary of Current Account Transactions
  • Table B16. Emerging Market and Developing Economies: Summary of External Debt and Debt Service
  • Table B17. Emerging Market and Developing Economies by Region: External Debt by Maturity
  • Table B18. Emerging Market and Developing Economies by Analytical Criteria: External Debt by Maturity
  • Table B19. Emerging Market and Developing Economies: Ratio of External Debt to GDP
  • Table B20. Emerging Market and Developing Economies: Debt-Service Ratios
  • Table B21. Emerging Market and Developing Economies, Medium-Term Baseline Scenario: Selected Economic Indicators

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