World Economic Outlook
Sustaining the Recovery
October 2009
World Economic and Financial Surveys
©2009 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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| Full Text | Boxes | Figures | ||||
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The Global Recession Is Ending Deleveraging and Slow Job Growth Ahead Improving, but Still Difficult, Financial Conditions Sluggish Real Sector Dynamics Continued, but Diminishing, Support from Policy A Subdued Recovery and Vulnerability to Mild Deflation Beyond 2010: How Will the Global Economy Rebalance? Risks to a Sustained Recovery Policy Challenges: Reconciling Short- and Medium-Term Objectives Appendix 1.1. Commodity Market Developments and Prospects References |
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| Chapter 2. Country and Regional Perspectives | ||||
| Full Text | Figures | ||||
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The U.S. Economy is Stabilizing as the Crisis Subsides Asia: From Rebound to Recovery? Europe: A Sluggish Recovery Lies Ahead Commonwealth of Independent States: A Difficult Recovery for Some and Damage Containment for Others Other Advanced Economies: On the Path to Recovery Latin America and the Caribbean: Policy Frameworks Have Promoted Resilience Middle East: Strengthening Growth Prospects Africa: Regaining Momentum |
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| Chapter 3. Lessons for Monetary Policy from Asset Price Fluctuations | ||||
| Full Text | Summary | Figures | ||||
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Asset Price Busts in the Modern Era Macroeconomic Patterns ahead of the Current Crisis The Role of Monetary Policy Should Policymakers React to Asset Market Fluctuations? Policy Conclusions Appendix 3.1 Econometric Methods Appendix 3.2 Data Sources References |
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| Chapter 4. What's the Damage? Medium-Term Output Dynamics after Financial Crises | ||||
| Full Text | Summary | Boxes | Figures | ||||
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Does Output Recover over the Medium Term? Decompositions: Why Does Aggregate Output Fail to Recover after a Banking Crisis? What Factors Are Associated with Medium-Term Output Losses? Implications for the Outlook after the Current Financial Crisis Appendix 4.1 Data Sources and Methodologies References |
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| Annex: IMF Executive Board Discussion of the Outlook, September 2009 | ||||
| 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 (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) | ||||
| World Economic Outlook, Selected Topics | ||||
| Boxes | |||
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Chart Chart |
Data Data |
1.1 | Trade Finance and Global Trade: New Evidence from Bank Surveys |
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Chart Chart |
Data Data |
1.2 | Were Financial Markets in Emerging Economies More Resilient than in Past Crises? |
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Chart Chart Chart |
Data Data Data |
1.3 | Will the Recovery Be Jobless? |
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Chart Chart Chart Chart Chart Chart Chart |
Data Data Data Data Data Data Data |
1.4 | Risks from Real Estate Markets |
| Chart | Data | 1.5 | From Deficit to Surplus: Recent Shifts in Global Current Accounts |
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Data Data Data |
1.6 | What Do Options Markets Tell Us about Commodity Price Prospects? |
| Chart | Data | 1.7 | What Explains the Rise in Food Price Volatility? |
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Chart Chart |
Data Data |
4.1 | A Historical Perspective on International Financial Crises |
| Tables | |||
| 1.1 | Overview of the World Economic Outlook Projections | ||
| 1.2 | Commodity Price Developments, 2008-09 | ||
| 1.3 | Commodity Consumption and Market Share | ||
| 1.4 | Global Oil Demand and Production by Region | ||
| 2.1 | Advanced Economies: Real GDP, Consumer Prices, and Unemployment | ||
| 2.2 | Selected Asian Economies: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.3 | Advanced Economies: Current Account Positions | ||
| 2.4 | Selected Emerging 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 Eastern Economies: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.8 | Selected African Economies: Real GDP, Consumer Prices, and Current Account Balance | ||
| 3.1 | House Price and Stock Price Busts from 1970 to 2008 | ||
| 3.2 | Classification of Observations Based on Variable Thresholds | ||
| 3.3 | Parameters and Performance of Policy Regimes in Reaction to Financial Shocks | ||
| 3.4 | Parameters and Performance of Policy Regimes in Reaction to Productivity Shocks | ||
| 3.5 | Percentiles Used as Thresholds for Alarms | ||
| 3.6 | Marginal Probabilities Based on Probit Regressions | ||
| 4.1 | Output Losses versus Initial Conditions | ||
| 4.2 | Output Losses versus Postcrisis Conditions and Policies | ||
| 4.3 | Robustness: Output Losses versus Initial Conditions, Crisis Severity Omitted | ||
| 4.4 | Robustness: Output Losses versus Postcrisis Conditions, Crisis Severity Omitted | ||
| 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 | Measures of Monetary Policy and Liquidity in Selected Advanced Economies |
| Chart | Data | 1.7 | General Government Fiscal balances and Public Debt |
| Chart | Data | 1.8 | Public Support to Ease Financial Stress |
| Chart | Data | 1.9 | Global Outlook |
| Chart | Data | 1.10 | Global Inflation |
| Chart | Data | 1.11 | Potential Growth and Unemployment Rates |
| Chart | Data | 1.12 | GDP Growth |
| Chart | Data | 1.13 | Global Imbalances |
| Chart | Data | 1.14 | Risks to the Global Outlook |
| Chart | Data | 1.15 | Global Scenarios |
| Chart | Data | 1.16 | Commodity and Petroleum Prices |
| Chart | Data | 1.17 | Commodity Prices in Global Recessions |
| Chart | Data | 1.18 | World Energy Market Developments |
| Chart | Data | 1.19 | Developments in Metal Markets |
| Chart | Data | 1.20 | Recent Developments in Markets for Major Food Crops |
| Chart | Data | 2.1 | United States: Signs of Stabilization |
| Chart | Data | 2.2 | Advanced and Emerging Asia: Can the Recovery Be Sustained? |
| Chart | Data | 2.3 | Europe: A Slow Rebound |
| Chart | Data | 2.4 | Europe: Challenges Ahead |
| Chart | Data | 2.5 | Commonwealth of Independent States (CIS): An Arduous Road to Recovery |
| Chart | Data | 2.6 | Australia, Canada, and New Zealand: Turning the Page |
| Chart | Data | 2.7 | Latin America: Recovery Is within Reach |
| Chart | Data | 2.8 | Middle East: Resuming Growth |
| Chart | Data | 2.9 | Africa: Resilient Economies |
| Chart | Data | 3.1 | Asset Price Busts |
| Chart | Data | 3.2 | Selected Macroeconomic Variables before and during House Price Busts |
| Chart | Data | 3.3 | Selected Macroeconomic Variables before and during Stock Price Busts |
| Chart | Data | 3.4 | Selected Macroeconomic Variables before and during High-Cost and Other House Price Busts, 1985-2008 |
| Chart | Data | 3.5 | The Probability of an Asset Price Bust |
| Chart | Data | 3.6 | The Failure of the Indicators to Predict an Asset Price Bust |
| Chart | Data | 3.7 | Recent Developments in House and Stock Prices |
| Chart | Data | 3.8 | Warning Signs for Recent House Price Busts |
| Chart | Data | 3.9 | Macroeconomic Patterns Underlying Recent House Price Booms |
| Chart | Data | 3.10 | Recent House Price Booms and Household Balance Sheets |
| Chart | Data | 3.11 | Monetary Policy before House Price Busts |
| Chart | Data | 3.12 | Inflation and Output for Advanced Economies in Recent Years |
| Chart | Data | 3.13 | House Prices and Monetary Conditions |
| Chart | Data | 3.14 | Stock Prices and Monetary Conditions |
| Chart | Data | 3.15 | Effects of a Financial Shock |
| Chart | Data | 3.16 | Effects of a Productivity Shock |
| Chart | Data | 3.17 | Optimal Weight on Nominal Credit in the Macroprudential Rule |
| Chart | Data | 4.1 | Medium-Term Output per Capita after Financial Crises: Case Studies |
| Chart | Data | 4.2 | Distribution of Crises across Time and Economy Type |
| Chart | Data | 4.3 | Methodology Example (Korea 1997) |
| Chart | Data | 4.4 | Output Evolution after Banking and Currency Crises |
| Chart | Data | 4.5 | Medium-Term Growth after Banking Crises |
| Chart | Data | 4.6 | Output Decomposition |
| Chart | Data | 4.7 | Demand-Side Decomposition |
| Chart | Data | 4.8 | Output Evolution versus Precrisis Investment |
| Chart | Data | 4.9 | Output Evolution versus Precrisis Imbalances |
| Chart | Data | 4.10 | Output Evolution versus Financial Development and Income |
| Chart | Data | 4.11 | Output, Twin Crises, and Financial Openness |
| Chart | Data | 4.12 | Employment Losses and Employment Protection Legislation |
| Chart | Data | 4.13 | Output Losses and Macroeconomic Stimulus |
| Chart | Data | 4.14 | Postcrisis Associations of Key Variables with Output Losses |
| Chart | Data | 4.15 | Output Evolution after Banking Crises: Alternative Measures of Precrisis Trend |